More: Read the Energy Information Administration’s full report.
Oil and gasoline prices are expected to rise even though the United States is producing more petroleum than ever before, according to August’s outlook from the U.S. Energy Information Administration.
In a forecast released Tuesday, the EIA projected Brent crude oil prices averaging $85 a barrel. Prices have been rising since June, largely thanks to a strategic cut in production by Saudi Arabia and a growing demand globally.
The Brent price is expected to average $86 a barrel for the second half of this year, up about $7 from the EIA’s June forecast.
“Rising global oil production in 2024 in our forecast keeps pace with oil demand and puts moderate downward pressure on crude oil prices beginning in the second quarter of 2024,” the outlook said.
Oil and gas prices have been rising even as domestic oil production has set records.
“As a result of higher expected well-level productivity and higher crude oil prices, we expect U.S. crude oil production will average 12.8 million [barrels per day] in 2023 and 13.1 million [barrels per day] in 2024, both annual records,” the outlook said.
Natural gas production is also up in the Permian Basin of Texas, because increased oil drilling in the region often goes hand in hand with dry gas production, but production is expected to stay at about 104 billion cubic feet of gas per day through the end of next year, up from 103 billion this year. “Flat production largely reflects continuing growth in associated natural gas production offset by declines in natural gas directed drilling.
The hot summer has driven near records in electricity generation, the EIA said, estimating total electric power sales of 388 billion kilowatt-hours from the first of July through the end of this month, “roughly equal to to the record electricity consumption in July and August 2022,” the outlook said.
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