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BofA: Oil Demand Growth Has Peaked

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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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U.S. Shale Shakes Off Slowdown Predictions

  • Several major U.S. oil producers, including Chevron and ExxonMobil, reported record outputs for Q2, leading to increased production forecasts.
  • The EIA and IEA both anticipate remarkable oil output gains from the U.S., with the EIA forecasting 12.8 million bpd in 2023 and 13.1 million bpd in 2024.
  • While OPEC+ production dipped in 2023, non-OPEC+ producers, especially the U.S., Brazil, and Guyana, are driving the global oil supply growth.

The U.S. shale patch, which accounts for most of the non-OPEC+ oil supply growth, is set to deliver stronger-than-anticipated production gains this year. 

Several significant producers raised their production guidance after announcing strong or record output in the second quarter, while the U.S. Energy Information Administration (EIA) raised its 2023 production forecast in its latest monthly report. The International Energy Agency (IEA) also expects strong output gains from the United States to lead a record global supply this year.  

In the past few weeks, some major U.S. producers reported record output in the Permian, while others raised their outlooks for year-on-year gains. 

Chevron reported a record-high Permian Basin production, which increased by 11% in the second quarter of 2023 compared to the year-ago period. 

"Strong execution resulted in record Permian Basin production this quarter," chairman and chief executive officer Mike Wirth said. 

Chevron's worldwide net oil-equivalent production rose by 2% from the year-ago quarter, primarily due to record Permian production of 772,000 barrels of oil equivalent per day (boepd).

Chevron plans to further increase its investments in the United States with the announced agreement to acquire PDC Energy, Inc.

The other U.S. supermajor, ExxonMobil, achieved record quarterly production in the Permian and Guyana in Q2. 

"Production is up 20% year-over-year in Guyana and the Permian," said chairman and CEO Darren Woods. 

ConocoPhillips, for its part, also delivered record production in the second quarter, driven by the Lower 48 output. 

"We achieved record production and increased our full-year production guidance for the second consecutive quarter," said Ryan Lance, chairman and chief executive officer. 

Full-year production is now expected to be 1.80-1.81 million boepd, compared to the prior guidance of 1.78-1.80 million boepd. 

Pioneer Natural Resources saw its Q2 oil production near the top end of the guidance range.

"Continued strong well productivity and highly efficient operations underpin our ability to increase full-year production guidance, while lowering full-year capital guidance through a purposeful reduction in activity," Rich Dealy, President and Chief Operating Officer, said. 

Total production for 2023 is now expected to range from 697,000 boepd to 717,000 boepd, an increase of 22,000 boepd at the midpoint when compared to original 2023 guidance. 

Occidental's second-quarter production of 1.218 million boepd exceeded the mid-point of guidance by 42,000 boepd, and the company raised full-year production guidance to 1.21 million boepd. 

"Our team's technical achievements have positioned us for a strong second half of 2023, giving us confidence to raise full-year oil and gas production guidance," President and CEO Vicki Hollub said

Pipeline operator Enterprise Products Partners is getting upbeat messages from producers about activity, Tony Chovanec, VP Fundamentals and Supply Appraisal, said on the midstream operator's Q2 earnings call

"Watch what the producers are saying on -- during the second quarter. No one has a bad story. Everybody is very, very upbeat," Chovanec told analysts. 

The EIA is also upbeat on U.S. crude oil production and raised last week its forecasts in the latest Short-Term Energy Outlook (STEO) for August. 


As a result of higher expected well-level productivity and higher crude oil prices, the EIA now expects U.S. crude oil production will average 12.8 million bpd in 2023 and 13.1 million bpd in 2024, both annual records. The forecasts were raised by 200,000 bpd for 2023 and by 300,000 bpd for 2024 compared to the projections in July. 

As in previous years, the United States is leading non-OPEC+ production growth. 

The IEA said in its Oil Market Report last week that global oil output is projected to expand by 1.5 million bpd to a record 101.5 million bpd in 2023, with the U.S. driving non-OPEC+ gains of 1.9 million bpd. 

In July 2023, OPEC+ production of 50.7 million bpd was down by more than 2 million bpd from the start of the year. Over the same period, producers outside the group ramped up output by 1.6 million bpd to 50.2 million bpd, the agency said. 

The U.S., Brazil, and Guyana lead the expansion, with exports from the trio rising by roughly 15% year over year to more than 9 million bpd in July, boosting the availability of light sweet grades in the Atlantic Basin. The U.S. will account for nearly 80% of global 2023 supply growth, or 1.2 million bpd of the 1.5 million bpd total, the IEA noted.      

By Tsvetana Paraskova for Oilprice.com

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