Last Wednesday, the Energy Information Administration (EIA) took a peek into their crystal ball to predict future US crude oil production.
In 2022, the United States is expected to produce 12 million barrels of oil per day and reach a peak production rate of 12.6 million barrels per day in 2023, according to the EIA. The US produced 11.2 million barrels of oil per day in 2021 for comparison. Most of this growth will come from the southwest's legendary Permian Basin.
What does this mean for you
What does this mean for you at the pump? Shouldn't the scales tilt in favor of lower fuel and energy prices? Should you start considering an EV?
Unfortunately, the EIA says decreased oil prices are unlikely. If anything, increased oil production is primarily the result of imposing high prices over a lengthy period of time.
Oil prices are additionally influenced by a variety of other factors, not simply supply and demand, making the situation more complicated. Other factors are the reserves (how much of the stuff is available to drill), how fast it can be refined, how much is in existing inventories (right now there isn’t much buffer), and, naturally, the politics surrounding it all.
Tensions between the US and Russia, which is the world's third-largest oil producer, have already had an impact on the price of oil in here, pushing it to $94 per barrel. If it goes as high as $110, it could possibly push inflation to 10%