At the 2023 ADI Forum, Uday Turaga, CEO, ADI Analytics, provided an outlook on the state of oil markets. He detailed U.S. production growth in 2022, which hadn’t yet reached pre-COVID levels. However, he expressed optimism, as U.S. oil production was growing, driven by the Permian Basin and other shale plays. It was expected to hit nearly 12 million barrels/day in 2022.
Globally, Russian supply was anticipated to drop due to sanctions. However, OPEC and non-OPEC production increases should offset this. Oil demand was projected to stay strong, keeping prices high as OPEC aimed to maximize revenue. While U.S. shale remained competitive with low break-even costs, oil prices faced upside risks from China’s reopening. Furthermore, prices had downside risks from a recession or stabilized European gas markets. Even small shifts in supply/demand could significantly impact prices.
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