US oil production to hit record this year, government agency EIA expects

Oil production in the United States will rise by 850.000 barrels per day this year to a record 12.76 million barrels per day. Production will continue to increase next year, reaching 13.09 million barrels per day. The US Energy Information Administration (EIA) said this in its report.

This year's production will surpass the record set in 2019, when it stood at 12.3 million barrels per day. The COVID-19 pandemic subsequently caused demand and prices to plunge. Higher costs, which reduced profit margins, and investor demands to rein in spending also had a negative impact on producers.

According to the EIA, higher well productivity and rising oil prices will contribute to production growth. The price of key North Sea Brent crude is expected to average $86 per barrel in the second half of this year, about seven dollars more than the EIA estimated in its previous forecast.

Oil prices have been rising since June, mainly because Saudi Arabia extended its voluntary production cuts and global demand has been growing. „We expect these factors to continue to reduce global oil inventories and put upward pressure on oil prices in the coming months,“ the EIA said.

Total oil consumption in the US is estimated to increase by 200.000 barrels per day this year to 20.5 million barrels per day. It is expected to rise by a further 200.000 barrels per day next year.