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Non-OPEC’s share of oil output to grow by 1.9 mbpd this year -EIA

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Non-OPEC countries will account for a higher percentage of oil production gains this year and next, a reversal of the last two years, the U.S. Energy Information Administration predicted on Tuesday.

Gains by the U.S., Brazil, Canada, and Guyana will overshadow OPEC after Saudi Arabia and other Middle East producers this month disclosed plans to cut output by around 1.16 million barrels per day beginning next month.

Total non-OPEC liquid fuel production is expected to grow by 1.9 million barrels per day (bpd) in 2023 and by 1 million bpd in 2024, the EIA said in its Short Term Energy Outlook. OPEC output will fall by 500,000 bpd in 2023, then rise by 1 million bpd in 2024 after the group’s output agreement expires, according to the EIA forecast.

About half of the forecast gain by non-OPEC producers in the next two years will come from the United States, the agency said. U.S. crude oil production is set to rise 5.5 percent to 12.54 million bpd this year and another 1.7 percent, to 12.75 million bpd, in 2024.

GASOLINE PRICES

U.S. retail gasoline prices are expected to average around $3.50 per gallon this summer, peaking between $3.60 per gallon and $3.70 per gallon in June, the EIA said. A year ago, prices jumped to $5 a gallon as oil soared and storage levels shrank.

The average U.S. household is expected to spend between $2,140 and $2,730 on gasoline this year, down from $2,780 in 2022, according to the EIA forecast.

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U.S. motor travel rose 3.8 percent for the first two months of this year compared with a year ago, the U.S. Department of Transportation estimated.

Gasoline stockpiles have been falling as refineries undergo overhauls, raising fears of higher prices this summer. However, the EIA estimates refiners’ gasoline output will rise faster than U.S. consumption, raising stocks and lowering prices.

The U.S. average retail price for a gallon of gasoline was $3.608 this week, down from $4.11 a year earlier, motorist group AAA said.

Brent crude oil spot prices will average $85 per barrel this year, while West Texas Intermediate U.S. crude is expected to average $79.24. Both estimates were about $2 higher than the EIA’s March forecast on OPEC’s output curbs.

The higher crude oil prices could hurt refining margins and encourage refiners to lower throughput, the EIA warned, forecasting average U.S. refinery utilization of 90 percent this year, down from more than 91% last year.

Oil demand is expected to remain relatively stable. Liquid fuel consumption will rise by 1.4 million bpd in 2023 and by 1.8 million bpd in 2024, the EIA said. It expects global oil markets to be in relative balance over the coming year.

U.S. petroleum and other liquid fuel consumption would tick up 0.5% to 20.4 million bpd in 2023 and rise 1.6 percent to 20.7 million bpd in 2024, the EIA added.

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