February 07, 2024 [Oil Price]- U.S. crude oil production fell in January and isn’t expected to grow at all this year, the EIA said on Tuesday in its latest Short Term Energy Outlook. The Agency also lowered its U.S. oil demand forecast to 20.39 million barrels per day from its previous forecast of 20.45 million barrels per day.
The cold snap that hit parts of the United States in January took crude oil production offline, causing daily production to fall to just 12.6 million barrels per day—down from 13.3 million bpd, the EIA said. And while the EIA expects U.S. oil production to return in February to levels just under the record, it expects production to drop slightly for the remainder of the year.
According to the EIA, it will be February of 2025 before another record is reached. “We forecast production will return to almost 13.3 million b/d in February but then decrease slightly through the middle of 2024 and will not exceed the December 2023 record until February 2025,” the EIA said in its STEO.
If accurate, the lack of production growth in the United States could help OPEC tighten the market, supporting crude oil prices. The EIA sees a global oil supply deficit of 120,000 bpd this year.
The prediction falls between the IEA’s and OPEC’s forecasts. The IEA’s forecast suggests a supply and demand balance for most of 2024, and with the possibility at least of a supply surplus in the second half of the year. OPEC, on the other hand, sees healthy oil demand this year and a lingering supply deficit until next year.
The EIA’s latest estimate of weekly field production of crude oil pegs the daily rate at 13 million bpd as of January 26, about 200,000 bpd under the all-time high of 13.3 million bpd. But production for the week prior, during the cold snap, was estimated to have dropped to 12.3 million bpd.
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