EIA Projects 8% Increase in Permian Basin Crude Oil Production for 2024

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The U.S. Energy Information Administration (EIA) forecasts a significant boost in crude oil production from the Permian Basin, predicting an average output of about 6.3 million barrels per day in 2024. This represents an almost 8 percent increase from 2023 levels. As the Permian Basin contributes nearly half of the U.S. crude oil production, this surge is expected to propel U.S. oil production to new record highs in 2024 and 2025.

Expanding its Short-Term Energy Outlook (STEO), the EIA now includes detailed regional trends for key oil and natural gas production areas across the United States—Appalachia, Bakken, Eagle Ford, Haynesville, and Permian. This enhanced regional forecasting aims to provide a more nuanced understanding of hydrocarbon production trends.

EIA Administrator Joe DeCarolis emphasized the benefits of incorporating regional forecasts. “By examining regional oil and natural gas production, we can offer a clearer picture of the production dynamics in the U.S.,” he stated. DeCarolis pointed out that the rapid decline in natural gas prices, despite steady production levels, is largely due to associated natural gas, a byproduct of increased crude oil production. The updated forecasts now better illustrate the regional interconnections between oil and natural gas production.

Despite the growth in oil production, the EIA anticipates a slight decrease of just over 1 percent in U.S. marketed natural gas production in 2024, attributed to lower natural gas prices. While production is expected to rise in the Permian, Bakken, and Eagle Ford regions, it is forecasted to decline in other major producing areas.

Other Key Highlights from the June STEO:

Electricity Consumption: The EIA has revised its forecasts for electricity consumption in the U.S. commercial sector, predicting a 3 percent increase in 2024 due to higher demand from data centers. The most significant growth is expected in the South Atlantic (5 percent) and West South Central (3 percent) regions.

Summer Electricity Bills: Residential electricity bills this summer are projected to average $173, similar to last summer’s $168. Although the national average price of electricity remains stable, increased air conditioning usage will drive up household electricity consumption. An additional EIA supplement will analyze summer electricity usage and expenditures in detail.

Distillate Fuel Consumption: The EIA expects a 1 percent rise in distillate fuel consumption in the latter half of 2024 compared to the same period last year, driven by increased manufacturing activity leading to more on-highway trucking, which is the largest consumer of distillate fuel oil.

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