EIA: US oil production will be lower than expected in 2025 due to falling prices
Energy Information Administration's monthly report on Tuesday predicted that the U.S. would produce less oil by 2025 than originally expected, as lower oil prices have caused U.S. producers this year to reduce their activity.
In its report on short-term energy forecast, the EIA stated that it expects to see 13.37 million barrels of oil per day produced by the world's biggest oil producer in 2025. This is compared to last month's estimate of 13.42 millions bpd. The U.S. is expected to produce 13,37 million barrels per day in 2026. This is the same as the previous estimate.
The 2025 forecast is still high but lower than the record-breaking level of 2013. This comes at a time when U.S. producers are coping with President Donald Trump’s tariffs, which have caused economic uncertainty. They also have to deal with the rising supply quotas of the Organization of Petroleum Exporting Countries (OPEC) and its allies and the conflict between Iran and Israel. In 2024, the U.S. produced 13,21 million bpd. Trump campaigned in January on the promise to boost domestic energy production. Last month, Trump urged his government to "drill baby drill" following U.S. strikes on Iran's nucleus facilities which caused fears of an increase in energy prices.
Brent crude futures prices are expected to average $68.89 per barrel this year, up from $65.97. Brent prices will average $58.48 a barrel by 2026. The EIA stated that the increase in forecast was primarily due to higher prices near-term, as a result of a greater geopolitical premium resulting from the conflict over Iran's nuclear programme. The EIA still expects global oil inventories to rise, which will put pressure on prices. The EIA predicts that U.S. West Texas Intermediate Crude Futures will average $65.22 a barrel in 2025. This is up from its previous forecast of $60.33 per barrel. It said that WTI prices would average $54.82 per barrel by 2026. The EIA reported that the U.S. demand for oil in 2025 would increase to 20,4 million barrels per day from 203,3 million in 2024. The demand is expected to remain steady in 2019. Reporting by Stephanie Kelly Editing Rod Nickel
(source: Reuters)
