By: Dr. Franyi Sarmiento, Ph.D., Inspenet, April 13, 2022.
US crude output will grow at a slower-than-expected pace as shale producers face higher production and labor costs amid runaway inflation.
Production in 2022 is now expected to average 12.01 million barrels per day compared with the previous forecast of 12.03 million barrels per day, according to the Energy Information Administration.
The revisions come as the Biden Administration struggles to contain rising inflation fueled by rising energy costs. Oil has soared above $100 as the war in Ukraine has limited exports of Russian crude to the world market as OPEC and its allies struggle to meet production targets.
Meanwhile, many publicly traded oil producers in the US have increased production at a more moderate pace compared to previous price booms, as investors pressure them to increase yields.
By 2023, the EIA expects production to increase by 940,000 barrels per day to an average of 12.95 million, compared with its previous forecast of an increase of 960,000 barrels per day.
Oil demand is expected to increase 800,000 barrels per day to 20.58 million against an increase of 870,000.
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