Sustained higher oil prices are expected to spur higher U.S. oil output this year, JP Morgan analysts said in a weekly note, as reported by Reuters.
“At current prices, most U.S. onshore operators are economic, leaving a vast group of operators, from large public companies to private players, in good position to ramp up activity in 2H21 and build solid momentum for higher volumes in 2022,” they said.
The bank now forecasts U.S. crude oil production to average 11.78 million barrels per day (bpd) in December 2021, up 710,000 bpd year-on-year.
The bank projects U.S. tight oil production to average 11.36 million bpd in 2021, compared to 11.32 million bpd last year.
Earlier this week, the Energy Information Administration said U.S. crude oil production is expected to fall by 160,000 bpd in 2021 to 11.15 million bpd, a smaller decline than its previous monthly forecast for a 290,000-bpd drop.
Oil prices have staged a spectacular recovery since hitting record lows last year at the height of the COVID-19 pandemic.
U.S. WTI crude futures which traded at about -$40 a barrel in April 2020, bounced back by nearly 270% from those lows, trading at nearly $68 a barrel on March 8.
Reporting by Ahmad Ghaddar; editing by Emelia Sithole-Matarise
