From IER: EIA’s Short-term Energy Outlook Lowers Its Oil Production Forecast for 2024

[Note: This excellent analysis of the latest Short-Term Energy Outlook from the US EIA was compiled by the folks at the Institute for Energy Research, a DC-based think tank led by President Tom Pyle, who is a frequent guest on my podcast, The Energy Question. Give it a read - you’ll be glad you did.]

Key Takeaways

1 - EIA has lowered its estimates for increased domestic oil production for 2024–below the increased production in 2023.

2 - Much of the increased production is occurring in the Permian Basin of Texas and New Mexico, where horizontal drilling and hydraulic fracturing have unlocked huge new resources which led to U.S. energy independence in 2019.

3 - Ingenuity of the U.S. oil and gas industry continues to increase efficiency and improve technology.

4 - President Biden has 175 rules and policies that negatively affect oil and gas production in the longer term, mostly from federal lands and waters, where the federal government owns 2.46 billion acres of mineral estate in the United States, larger than the surface area of the country.

The U.S. Energy Information Administration (EIA) reduced its forecast for domestic oil production growth in 2024 by 120,000 barrels per day to 170,000 barrels per day, as oil production fell in January because of shut-ins related to cold weather, particularly in oil producing North Dakota.  U.S. oil production reached an all-time high in December of more than 13.3 million barrels per day, but fell to 12.6 million barrels per day in January. EIA expects oil production to almost reach December’s high in February and then decrease slightly through the middle of 2024, but reach an annual production of 13.1 million barrels per day, higher than the 12.93 barrels per day reached in 2023.  The agency does not expect oil production to exceed the December 2023 record until February 2025. In 2025, oil production is expected to increase by 390,000 barrels per day to a new record high of 13.49 million barrels per day.