US Sees Record 2023 Oil Output in Reversal After Cutting Outlook

Lucia Kassai, Bloomberg News

A Deere & Co. John Deere combine harvester drives past a pumpjack in the Bemis-Shutts oil field during the harvest of hard red winter wheat in Plainville, Kansas, U.S., on Wednesday, June 28, 2017. Spring wheat prices posted wide swings after reaching a four-year high as traders weighed prospects for an intensifying drought in the High Plains against signs that U.S. supplies aren't competitive in export markets. , Bloomberg

(Bloomberg) -- The US raised its forecast for oil production next year, reversing course after five straight months of cuts that stoked concern about a slowdown in output from shale fields.

Production is poised to reach 12.34 million a barrels a day next year, topping the record 12.315 million barrels a day set in 2019, according to a monthly report from the Energy Information Administration. That’s an about-face for the government agency following a sharp downward revision in November. The estimate for this year’s output also got a boost.

The forecast could help quell fears that that oil production from American shale fields, one of just a few sources of output growth globally, is decelerating even as crude prices remain well above drillers’ costs to break even. Though concerns about economic growth have kept downward pressure on the market in recent weeks, a slowdown in shale production would add to the risk of tight supplies after Russia’s invasion of Ukraine.

The US estimate was raised as oil rigs rise, climbing by about 30% so far this year, according to Baker Hughes Co. data. Shale producers have expanded drilling at cautious pace to focus on capital discipline and shareholder returns, much to the chagrin of President Joe Biden, who has called on explorers to pump more oil.