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The US Energy Information Administration (EIA) on Tuesday cut its forecast for domestic oil growth in 2024 by 120,000 barrels per day (bpd) to 170,000 bpd, sharply lower than last year's output increase of 1.02 million bpd.
US crude oil production will rise to 13.21 million barrels per day (bpd) this year,the EIA said in its Short-Term Energy Outlook (STEO). It had previously projected that crude production would rise this year by 290,000 bpd.
In December, US crude oil production was estimated to have reached a record high of 13.3 million bpd. Production notched an annual record of 13.21 million bpd in 2023.
US crude oil production fell to 12.6 million bpd in January because of shut-ins related to cold weather, particularly in key oil producing states such as North Dakota, according to the EIA.
Production is expected to rise by 390,000 bpd to 13.49 bpd in 2025, which would be a record high.
The agency forecast that monthly production will return to almost 13.3 million bpd this month, but then decrease slightly through the middle of 2024 and will not exceed the record set last December until February 2025.
US total petroleum consumption is expected to rise by 200,000 bpd to 20.4 million bpd in 2024, and then by another 100,000 bpd to 20.5 million bpd in 2025, the EIA said.
Attacks on shipping vessels by Iranian-backed Houthi rebels in the crucial Red Sea shipping lane beginning last year have disrupted traffic through the Suez Canal, the fastest sea route between Asia and Europe and one that sees nearly 12 per cent of the global oil trade.
Global oil inventories are believed to have increased by 800,000 bpd on average from October 2023, the month before the Red Sea attacks began, through January 2024 and by an average of 700,000 bpd for all of 2023, the EIA said.
It expects the price of a barrel of crude oil will rise into the mid-$80s area in the coming months, but will experience downward price pressure in the second quarter of this year as global oil inventories increase. -Reuters