EIA: Oil production will be low in the second half of 2023 and in 2024, while consumption and prices will rise

The U.S. government agency U. S. Energy Information Administration (EIA) expects crude oil prices to rise in the second half of this year and at the beginning of 2024. The reason is a combination of relatively low oil production compared with previous years and an expected increase in oil demand, particularly in China and India.

At the beginning of June, the group of oil producers OPEC+ announced that it would continue its oil production cuts and extend them through the end of 2024. The cuts were originally set to run only until the end of 2023. Saudi Arabia also announced a voluntary reduction in its production of approximately 1 million barrels of oil per day (b/d) to 9 million b/d in July and August 2023.

These oil production cuts will keep total output from OPEC countries below the pre-pandemic 2015–2019 average of 36,2 million b/d. Average OPEC production is expected to reach 33,9 million b/d during 2024, reducing OPEC’s share of global oil production to 33 % in 2024, compared with an average share of 37 % in 2015–2019.