US oil output is expected to return to a near record high averaging 13 million barrels daily by next year, the Energy Information Administration forecast as oil drillers in the country suggested they may produce more after crude prices hit 14-year highs above $130 a barrel.
"We forecast that production will rise to average 12.0 million b/d in 2022 and then to record high production on an annual-average basis of 13.0 million b/d in 2023," the EIA said in its monthly report on the US Short-Term Energy Outlook on Tuesday.
US oil production hit all-time highs of 13.1 million barrels daily in March 2020, just before the onset of the coronavirus pandemic. The demand destruction in energy that followed sent the benchmark price of US crude to a historic minus $40 per barrel in April 2020 and production to below 11.6 million barrels daily by December that year.
Since those lows, oil prices have jumped dramatically though production has barely picked up, standing at just around 11.6 million barrels last week, according to weekly EIA data.
US West Texas Intermediate crude currently trades at around $125 a barrel, after hitting above $130 this week on fears of a global supply crisis sparked by sanctions on Russia from US and European government's protesting Moscow's war against Ukraine. The retail price of automobile fuel gasoline at US pumps, meanwhile, starts at 14-year highs of around $4 a gallon.
The EIA production outlook came as Scott Sheffield, chief executive of Pioneer Natural Resources, the biggest US shale oil driller, told London-based Financial Times in an interview published Tuesday that America needs to add up to 2.5 million barrels daily in production to bring output meaningfully higher and gasoline prices lower.
But Sheffield said this cannot be done overnight. The process will take months, requiring the blessings of each drilling company's shareholders -- who were just earning the dividends they deserved, after losing money for years on shale oil, he said.
"We'd have to go to our shareholder base and ask what their thoughts are," Sheffield added.
Separately, the shale industry and rival Republican politicians in Congress supported President Joe Biden on Tuesday in his announcement of a unilateral US ban on Russian oil that would add to existing sanctions against Moscow. (ANI/Sputnik)
( With inputs from ANI )
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