The US Energy Information Administration (EIA) forecasts that US crude oil production will average 11.9 million bpd in 2022, and 12.8 million bpd in 2023, which would surpass the record average production of 12.3 million bpd set in 2019. Despite the increases in production, the EIA expects the Brent crude oil price to remain above US$100/bbl in 2022, according to the agency’s May 2022 Short-Term Energy Outlook (STEO).
“A high level of uncertainty remains in our outlooks, but we have consistently forecast that elevated crude oil prices would help drive record-level annual U.S. oil production levels in 2023,” said EIA Administrator, Joe DeCarolis. “Low global oil inventories coupled with continued high demand for gasoline, diesel, and other petroleum products means that increased production likely won’t have much impact on prices in the short term.”
Other key takeaways from the May 2022 STEO forecast include:
- Solar and wind power will provide 11.1% of US electricity generation during summer 2022, up from 9.6% in summer 2021. Solar and wind are the only energy sources that will increase their share of US electricity generation this summer. “High natural gas prices, limited coal supply, and increased solar and wind capacity mean that renewables should play a larger role in the US electricity mix this summer and throughout the year,” DeCarolis said.
- The Henry Hub natural gas price will average US$8.59/ million Btu in 2H22, which is an 88% increase from 2H21. This forecast is a significant revision from previous forecasts, largely because the EIA updated its power generation modelling to better account for evolving constraints in the coal market.
- US coal production will total 598 million t in 2022, which is a 3% increase from 2021. The EIA's recent STEO forecast a 7% increase in domestic coal production, and based in part on this revision, higher natural gas prices are expected later in 2022. “Currently low coal supplies and limited capacity to increase domestic coal production mean that natural gas will remain in high demand for electricity generation, contributing to the higher natural gas prices in our forecast,” DeCarolis said.
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