U.S. crude output will rise at slower-than-expected pace, EIA says
(Bloomberg) — U.S. crude output will grow at a more diminished pace than previously expected as shale producers grapple with higher production and labor costs amid rampant inflation.
Production in 2022 is now expected to average 12.01 million barrels a day compared to the previous forecast of 12.03 million barrels a day, according to the Energy Information Administration.
The revisions come as the Biden Administration struggles to contain surging inflation stoked by rising energy costs. Oil skyrocketed above $100 as the war in Ukraine has limited Russian crude exports into the global market while OPEC and its allies struggle to meet production targets. Meanwhile, many publicly traded oil producers in the U.S. have increased production at a more moderate pace compared with previous price booms as investors pressure them to boost returns.
For 2023, the EIA expects production to rise by 940,000 barrels a day to average 12.95 million, compared to its previous forecast for a rise of 960,000 barrels a day.
Oil demand is expected to rise 800,000 barrels a day to 20.58 million versus an increase of 870,000.