US Shale Oil Set for Production Boost in 2025: BNEF Forecast

U.S. shale oil production is poised for a significant boost, with BloombergNEF (BNEF) forecasting a 4.5% increase in output to 13.9 million barrels per day by 2025. This represents an additional 600,000 barrels per day compared to this year, thanks to improved well productivity and more efficient drilling and fracking techniques.

It should be noted that BNEF's projection is more optimistic than the U.S. Energy Information Administration's (EIA) estimate of 13.7 million barrels per day, and decidedly more optimistic than OPEC's estimate for U.S. production of 13.49 million barrels per day in 2025.

According to BNEF analyst Tai Liu, the industry has achieved these gains by reducing capital spending without compromising well completions, a testament to the ongoing efficiency improvements in shale operations.

This forecast comes at a time when oil prices have dropped 17% from their peak earlier this year, driven by lower-than-expected demand, particularly from China. The anticipated increase in U.S. production could put further downward pressure on prices, which may have political implications as the U.S. heads into an election year.

If U.S. shale production rises as Bloomberg predicts, it could lead to a surplus of oil, potentially driving prices down further. This scenario would be particularly beneficial for the Biden Administration, with Vice President Kamala Harris—the presumed Democrat candidate—potentially reaping the rewards of lower crude prices during the 2024 election campaign.

The intersection of market dynamics, media influence, and political timing raises thought-provoking questions about the role such forecasts may play in shaping the oil market landscape as election day approaches.

Brent crude oil prices were trading up on the day on Thursday at more than $76 per barrel at the time of writing.

By Julianne Geiger for Oilprice.com

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