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EIA forecasts increasing US crude volumes
Agency expects 2% growth from 12.9 million bpd in 2023 to 13.2 million bpd in 2024, up additional 4% to 13.7 million bpd in 2025 Kristen Nelson Petroleum News
The U.S. Energy Information Administration expects to see U.S. crude oil production hit new annual records this year and next, up 2% from a 2023 annual average of 12.9 million barrels per day to 13.2 million bpd this year and increasing another 4% in 2025 to 13.7 million bpd.
Crude from the Permian basin, forecast to average some 6.3 million bpd this year, an increase of nearly 8% from 2022, will account for nearly half of U.S. production, EIA said in its June Short-Term Energy Outlook, released June 11.
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The agency is now including regional trends in its monthly forecasts for the major oil and natural gas producing regions of the country: Appalachia, Bakken, Eagle Ford, Haynesville and Permian.
"Incorporating regional forecasts of oil and natural gas production helps us tell a more comprehensive story of hydrocarbon production trends in the United States," said EIA Administrator Joe DeCarolis. "Consider the natural gas market, where we've seen prices decline far more rapidly than production. We knew that associated natural gas, which is produced as a byproduct of increasing crude oil production, was a driver of relatively stable natural gas production. Now our forecasts clearly show the important regional relationship of oil and natural gas production," DeCarolis said.
US crude, natural gas production EIA said almost two-thirds of expected U.S. crude oil production growth through the end of 2025 will come from the Permian, mostly Texas.
The agency said that continues a decade-long trend, with the Permian's "proximity to crude oil refining and export terminals on the Gulf Coast, established takeaway capacity, and improved new well productivity" all supporting growth of crude production in the region.
Also seeing strong production growth are the Eagle Ford and the federal offshore Gulf of Mexico, EIA said, with about 15% growth expected in each of those areas.
Drilling productivity also plays a role.
"Recent data on crude oil production from newly completed wells suggest operators in the Permian, Eagle Ford and Bakken regions have noticeably increased their productivity on a per-rig basis over the past 18 months," the agency said.
EIA said U.S. marketed natural gas production is expected to be down 1% in 2024, led by a 9% drop in the Haynesville and a 4% drop in Appalachia, "as some producers have limited development and production because of low natural gas prices."
May U.S. marketed natural gas is estimated at an average of 110 billion cubic feet per day, down 3% from the first quarter of the year, with Haynesville production down 15% and Appalachia down 3% in May, compared to the first quarter, driven by low natural gas prices.
In the Permian, by contrast, production is primarily natural gas from oil wells, so oil production is the driver, with May production almost flat with the first quarter.
In 2025, natural gas production is forecast to be up 2%, rising in most regions, on a combination of higher prices and more associated production in the Permian.
Oil, gas prices EIA said the Brent crude oil spot price averaged $82 per barrel in May, down $8 per barrel from April. EIA is forecasting an average Brent spot price of $84 per barrel this year, up from $82 per barrel in 2023, and forecast to remain relatively flat at $85 per barrel in 2025.
Benchmark Henry Hub spot natural gas prices are expected to rise in the summer, averaging just over $2.60 per million British thermal units in the third quarter, up from an average of $2.12 per million Btu in May, to average $2.50 for 2024, unchanged from 2023, and rise to $3.20 in 2025, with the drop in U.S. natural gas production in 2024 continuing to put upward pressure on the Henry Hub spot price, which is expected to increase to $3.30 per million Btu by the end of this year.
Global production EIA said it expects OPEC+ "to largely adhere to production targets announced on June 2," when voluntary production cuts were extended through September, rather than expiring at the end of June, with production cuts gradually phased out beginning in October, a phase out which will last through the end of September 2025.
In addition, production cuts announced in April 2023, and set to expire at the end of 2024, have been extended through the end of 2025.
While OPEC+ cuts are limiting production growth, EIA said it estimates that non-OPEC+ production growth will remain strong, forecast to increase by almost 2 million bpd this year, led by increased production from the U.S., Canada, Brazil and Guyana.
Global petroleum and liquid fuels production is expected to increase by 0.8 million bpd this year, and by 2.2 million bpd in 2025, with global consumption of liquid fuels expected to increase by 1.1 million bpd this year and by 1.5 million bpd in 2025, with most of that growth from non-OECD countries, led by China and India.
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