Goldman Sachs: At least until 2026, US crude oil production will remain strong

According to Goldman Sachs' forecast, the shale oil production boom in the United States will last for at least 18 months.

Analysts say that although the rapid growth of U.S. crude oil production has slowed slightly compared to 2023, they expect production in the Permian Basin to remain strong until the end of 2026. Data from the U.S. Energy Information Administration (EIA) shows that the U.S. crude oil daily production reached 12.9 million barrels last year, surpassing any other country in history.

Goldman Sachs stated that U.S. crude oil production will continue to grow in the coming years, albeit at a slower pace. Researchers predict that the growth rate of U.S. crude oil daily production will reach 340,000 barrels in 2024 and a "still strong" 270,000 barrels in 2026.

This growth will be largely supported by improved drilling efficiency and rising oil prices. Goldman Sachs predicts that drilling activity in the Permian Basin is highly sensitive to prices, with the WTI crude oil price expected to remain above $50 for at least the next 18 months.

Yulia Grigsby, an energy economist at Goldman Sachs Research, added in a statement: "By reducing drilling costs, shortening drilling and completion times, drilling and completion efficiency continues to improve."

Meanwhile, the slowdown in growth is largely due to aging oil wells across the entire Permian Basin.

Goldman Sachs predicts that the number of active oil drilling rigs in the region has decreased by 30% compared to the average recorded in 2018 and 2019, and this decline may continue until the end of 2026.

The bank added that the incremental production from wells may rise to 100 barrels per day in 2024, but will slow down to around 50 barrels per day starting from 2025, only a third of the growth seen in 2019.

Researchers said: "Years of intensive exploration and production have impacted the rock quality of the basin, leading to geological deformation that limits further increases in well productivity."

Due to market considerations of OPEC+ supply cuts and escalating geopolitical tensions in the Middle East, oil prices have risen this year. According to Goldman Sachs' previous forecasts, oil demand is expected to continue rising over the next 10 years, indicating that the market still faces risks of supply shortages. However, major energy agencies have differing views. The International Energy Agency (IEA) believes that oil demand will peak before 2030