One of my 2023 energy predictions was “Total U.S. oil production will again rise, and set a new annual production record.” The previous annual record was set in 2019 at 12.3 million barrels per day (bpd), and by the end of 2022 monthly production was just about back to that level following the devasting Covid-19 impact on the industry in 2020.
Of course, we don’t yet know if oil production will continue to creep higher, or whether falling prices will finally impact production. As I indicated when I made the prediction, I felt like it was a coin flip on whether we would reach a new annual record, but I leaned toward the affirmative.
A third of the year is now behind us, so let’s check in on this prediction. The Energy Information Administration (EIA) presently shows monthly production for January and February only. For those two months, oil production was 12.5 million bpd, a significant increase from December 2022’s level of 12.1 million bpd.
For March and April, we have to estimate the production rate based on the EIA’s weekly Petroleum Status Report (PSR). According to the U.S. Petroleum Balance Sheet for the Week Ending 3/31/2023, the four-week average oil production for March was 12.2 million bpd. That’s a good estimate for March.
Through three weeks of April, the production rate had risen slightly to 12.25 million bpd. Final April numbers may vary a bit from this, but it’s close enough to give us an estimate for the first third of the year.
Averaging the monthly numbers for January through April gives an average year-to-date production of 12.37 million bpd. That will slightly eclipse the 2019 record if that rate holds for the rest of the year. It will be close, but as I said previously it’s a coin toss.
The most recent EIA projections are that U.S. crude oil production is expected to increase to new records in 2023 and 2024. The EIA forecasts that U.S. crude oil production will average 12.4 million bpd in 2023 and 12.8 million bpd in 2024. The main drivers of this growth are expected to be increased production in the Permian region and the Federal Offshore Gulf of Mexico.
In conclusion, the first third of 2023 has shown promising signs for U.S. oil production, with the potential to surpass the previous annual record set in 2019. While it remains a close call, the EIA’s projections for 2023 and 2024 agree that the industry is on track to achieve new records in the coming years. This growth will undoubtedly help blunt the influence of OPEC and Russia on the U.S. economy and energy landscape.