EIA hikes US oil output forecast, says oversupply will slash prices

Core Insights - U.S. oil production is projected to reach a record average of 13.53 million barrels per day (bpd) in 2023, an increase from the previous forecast of 13.44 million bpd, surpassing last year's average of 13.23 million bpd [1][2] - The Energy Information Administration (EIA) anticipates a rise in crude oil inventories, which will exert downward pressure on prices in the coming months [2] - Average prices for U.S. West Texas Intermediate crude are expected to be around $65 per barrel in 2023, reflecting a 15% decline from the previous year, while Brent crude prices are projected to average $68.64 per barrel, also down nearly 15% from last year [3] U.S. Oil Production - The increase in the U.S. oil output forecast is attributed to higher production levels in July and faster-than-expected ramp-up of offshore projects in the U.S. Gulf region [4][5] - Offshore U.S. Gulf oil output is now expected to average 1.89 million bpd, up from the earlier estimate of 1.84 million bpd [5] Global Oil Market Dynamics - The EIA has raised its global oil output forecast, primarily due to anticipated growth in non-OPEC oil production [5] - Despite recent announcements from OPEC+ regarding production increases, the EIA maintains its forecasts for the group's output, suggesting that production increases will moderate as some members reach output limitations [6]