In the June STEO, EIA raised its estimate that 2022 crude oil production will increase 730k bpd vs 720k bpd a month ago and sees 2023 output increasing 1050k bpd vs 940k a month ago. The EIA estimate that U.S. production of crude oil and other liquids averaged 19.9 million b/d in May, which was within 3% of January 2020’s record high production of 20.5 million b/d. The EIA also estimate that OPEC crude oil and other liquids production has returned to pre-pandemic levels
- Estimate that U.S. production of crude oil and other liquids averaged 19.9 million b/d in May, which was within 3% of January 2020’s record high production of 20.5 million b/d.
- Estimate that OPEC crude oil and other liquids production has returned to pre-pandemic levels:
- May OPEC production was 33.7 million b/d, 1% higher than the first quarter of 2020 (1Q20) OPEC production of 33.4 million b/d.
- OPEC+ announced on June 2 that they will increase crude oil production targets for July and August.
- Forecast that OPEC crude oil and total liquid fuels production will increase to 34.6 million b/d in 3Q22, the highest since 2Q19.
- Forecast Russia’s production of total liquid fuels will decline from 11.3 million b/d in the first quarter of 2022 (1Q22) to 9.3 million b/d in 4Q23.
The June Short-Term Energy Outlook (STEO) is subject to heightened levels of uncertainty resulting from a variety of factors, including Russia’s full-scale invasion of Ukraine. Global macroeconomic assumptions in STEO are from Oxford Economics and include global GDP growth of 3.1% in 2022 and 3.4% in 2023, compared with growth of 6.0% in 2021. A range of potential macroeconomic outcomes could affect energy markets in the forecast period. Factors driving energy supply uncertainty include how sanctions affect Russia’s oil production, the production decisions of OPEC+, and the rate at which U.S. oil and natural gas producers increase drilling.
Global Oil Production
EIA forecast Russia’s production of total liquid fuels will decline from 11.3 million b/d in the first quarter of 2022 (1Q22) to 9.3 million b/d in 4Q23. This STEO incorporates the recently announced EU ban of seaborne crude oil and petroleum product imports from Russia.
EIA assume the crude oil import ban will be imposed in six months and the petroleum product import ban in eight months. This forecast does not reflect restrictions on shipping insurance, as details regarding such restrictions were not available when we finalized this forecast-on June 2. The possibility that these sanctions or other potential future sanctions reduce Russia’s oil production by more than expected creates upward risks for crude oil prices during the forecast period.
Forecast depends heavily on future production decisions by OPEC+, the responsiveness of U.S. tight oil production to oil prices, and the pace of oil demand growth, among other factors.
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