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A week ago, the Energy Information Administration (EIA) released its latest Short Term Energy Outlook (STEO) wherein it revised its 2022 and 2023 oil production outlook. The EIA revised 2022 U.S. crude oil supply higher by 80 thousand barrels per day (kb/d) to 11.828 million barrels per day (mb/d) and crude oil supply growth for 2022 higher by 80kb/d to 574kb/d. The energy watchdog, however, revised its 2023 production outlook lower by 21kb/d to 12.31mb/d and 2023 growth lower by 121kb/d to 487kb/d. This in effect means that next year’s output will fail to surpass the record 12.315 million barrels set in 2019. EIA also predicted that Brent prices will average $95.33 per barrel, down from the current year’s average of $102.13. The new projections have elicited mixed reactions across the board, with Bloomberg saying , “ The projection suggests the pace of US shale growth, one of the few sources of major new supply in recent year, is slowing despite oil prices hovering at around $90 a barrel, about double most domestic producers’ breakeven costs. If the trend continues, it would deprive the global market of additional barrels to help make up for OPEC+ production cuts and disruption […]
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