The U.S. Energy Information Administration (EIA) has increased its forecast for production of crude oil in the lower 48 U.S. states for the remainder of 2023 and into 2024. More productive oil wells and higher-than-expected oil prices are driving the agency’s forecast higher than previously predicted.

EIA expects 10.6 million barrels of oil to be produced per day (bpd) in late 2023, up 360,000 bpd from its most recent prediction. In 2024, oil production will be 240,000 bpd higher than expected, reaching 10.8 million bpd, with the largest share originating in the Permian Basin of New Mexico and West Texas.

Source: EIA

The crude oil production boost will be realized despite a coincident decline in rig counts. According to Baker Hughes, 520 oil-directed rigs were active in the U.S. in the first half of August 2023, an 81-rig decrease compared with the same period of 2022. However, increased well productivity has offset the decline in active rigs so far in 2023, and the number of active rigs is expected to increase in 2024.

Globally, liquid fuels production will increase by 1.4 million bpd in 2023. In 2024, global production will increase by 1.7 million bpd, with 1.2 million bpd contributed by the U.S., Brazil, Canada and other non-OPEC countries.