Crude oil production in the United States could reach 12.6 million barrels daily next year, which would be a record high on an annual-average basis, the Energy Information Administration said in its latest Short-Term Energy Outlook.
Oil production was already growing strongly, reaching 11.8 million bpd in November—the latest month the EIA has hard data for. It is still growing, too, and is expected to hit 12 million bpd this year.
Growth in U.S. production as well as growth in OPEC+ production prompted the EIA to revise its price projections for Brent crude and West Texas Intermediate for this year.
The authority now expects Brent crude to fall to some $75 per barrel by the end of the year, with the average for the full year at $82.87 per barrel. For West Texas Intermediate, the authority expects an average 2022 price of $79.35 per barrel.
“We expect Brent prices will average $90/b in February as continuing draws in global oil inventories in our forecast keep crude oil prices near current levels in the coming months,” the EIA said.
“However, we expect downward price pressures will emerge in the middle of the year as growth in oil production from OPEC+, the United States, and other non-OPEC countries outpaces slowing growth in global oil consumption.”
U.S. drillers indeed appear to be finally succumbing to the charm of higher oil prices and are boosting their drilling activities. In fact, these activities have at least one CEO of an oil major worried.
ConocoPhillips’ Ryan Lance earlier this month said he was concerned about the rate of growth in U.S. shale oil production. During a conference call, Lance said Conoco forecast an increase of 900,000 bpd in U.S. oil production this year, adding that “If you’re not worried about it you should be,” as quoted by Bloomberg.