According to the Energy Information Administration's (EIA) latest monthly report released on Tuesday, projections indicate a notable surge in U.S. crude oil production, with an estimated increase of 850,000 barrels per day (bpd) that will propel the production to an unprecedented 12.76 million bpd in the year 2023.

EIA data unveiled in the report also illustrates expectations for a subsequent uptick in crude oil production, indicating a rise of 330,000 bpd to reach 13.09 million bpd by the year 2024.

This projected surge in production marks a significant rebound from the previous high of 12.3 million bpd recorded in 2019, a level that faltered in the wake of the COVID-19 pandemic's harsh impact on demand and pricing. This period also witnessed drilling entities grappling with escalated costs, exerting pressure on profit margins and prompting calls from investors to curtail expenditures.

EIA attributes the enhanced forecasts to a twofold effect - the anticipation of heightened productivity at the well level and the prospect of elevated crude oil prices.

Global benchmark Brent crude oil prices are poised to maintain an average of $86 per barrel during the latter half of 2023, reflecting an upswing of approximately $7 per barrel compared to previous predictions, as indicated by EIA. Correspondingly, the outlook for U.S. GDP growth in 2023 has been revised upwards to a 1.9% expansion, an uptick from the 1.5% projected in the preceding month's assessment.

The steady ascent of crude prices, observed since June, stems primarily from extended voluntary cuts to Saudi Arabia's crude oil production, complemented by growing global demand.

The EIA highlights the continuation of these dynamics, contributing to the anticipated depletion of global oil inventories and exerting upward pressure on oil prices in the foreseeable future.

However, projections for the year 2024 envisage an equilibrium between rising global oil production and the concurrent increase in oil demand, which is expected to place downward pressure on crude oil prices, commencing in the second quarter of the said year.

The EIA report also unveils predictions for U.S. total petroleum consumption, foreseeing a rise of 200,000 bpd to attain 20.5 million bpd in 2023. This growth trajectory is anticipated to persist into 2024, with a further increase of 200,000 bpd to achieve 20.7 million bpd.

Notably, the EIA has reversed its earlier prognosis of a supply shortfall in the global oil markets for 2023. The agency's current stance reflects an anticipation of a more pronounced upsurge in non-OPEC OECD output compared to its previous outlook, which had indicated that petroleum consumption would surpass production in the present year.