EIA increases US and global oil production estimates by a small amount

The U.S. Energy Information Administration announced on Wednesday that both U.S. oil production and global oil output are expected to reach record highs in this year, slightly higher than previous forecasts.

Oil prices have fallen to their lowest level since 2021 despite the Organization of the Petroleum Exporting Countries (OPEC+) and its allies cutting production.

The EIA reported that the U.S. oil production is expected to reach an average of 13.23 million barrels a day (bpd), which is about 300,000 more than last year's 12.93 million bpd record. The EIA had earlier predicted that U.S. crude oil production would average 13,22 million barrels per day (bpd) this year. This is about 300,000 bpd higher than last year's record of 12.93 million bpd.

The EIA's November Short-Term Energy Outlook predicts that U.S. crude oil production will increase to 13,53 million bpd in 2019. This is a slight decrease from its previous forecast of 13.54 million bpd in October.

The agency increased its forecast for global oil production in 2024 from 102.5 million to 102.6 millions bpd. It expects a world production of 104.7 millions bpd next year. This is up from the previous 104.5 million.

EIA says that OPEC+'s production cuts will help to boost global oil prices from now until the first quarter next year. The EIA warned, however, that the members of the group may grow weary of these cuts, as they have been in effect for over two years.

The EIA stated that "although we assess that OPEC+ will likely continue to reduce production below the recently announced targets in 2020, the possibility of a weakening commitment by OPEC+ to continue reducing production adds downside risks to oil prices." Reporting by Shariq Khan and Scott DiSavino, New York. Editing by Franklin Paul and Marguerita Chy.

(source: Reuters)