The United States may increase oil production next year more than the country’s Energy Department predicts, BloombergNEF analysts say.

According to the latest forecast of the agency, oil production in the United States in 2023 will grow by 900 thousand barrels per day, to 12.85 million bpd. This forecast is 250 thousand barrels higher than the Energy Information Administration (EIA), which is part of the US Department of Energy. The EIA forecasts production at 12.6 million b/d next year.

The growth outlook for oil production “looks solid and resilient despite commodity price volatility, mainly because US oil fields” have low production costs, BloombergNEF expert Tai Liu said. In addition, the potential rise in oil prices after the entry into force of the EU embargo on oil supplies from Russia, as well as the need for reliable energy supplies will support US production, the report says.

Meanwhile, falling market prices may force oil companies to adjust their plans and cut production. The BloombergNEF forecast suggests that prices should drop to $50 per barrel for companies to change plans for 2023.

At the same time, US oil production may decline in 2024 if companies do not complete drilling of new wells. This will further aggravate the situation on the market, especially if demand recovers in the next two years.

BloombergNEF predicts that US oil production in 2024 will increase by less than 200 thousand b/d, to 13.04 million b/d.