Relying on the United States to increase production, will it be a dream? The country's oil production is expected to suffer "five consecutive declines" next year

The U.
S.
has sharply lowered its oil production forecast for 2023, the latest sign that the world cannot rely on increased U.
S.
shale production to reduce high energy prices
in the year ahead.

U.
S.
oil production is expected to reach 12.
31 million b/d in 2023, the fifth consecutive downward revision, according to the U.
S.
Energy Information Administration (EIA) monthly report released on Tuesday, after the previous forecast of 12.
36 million b/d, surpassing the record 12.
315 million b/d
set in 2019.

The latest forecasts suggest that while oil prices are hovering around $90 a barrel (about double the break-even cost of most U.
S.
shale oil producers), the pace of production increases by these producers is slowing
.
In recent years, U.
S.
shale oil has been one of the few new sources of
supply.
If this trend continues, global markets will not be able to get more oil to compensate for OPEC+ production cuts and supply losses
caused by the Russia-Ukraine conflict.

The EIA's comments come at a time when voting in the US midterm elections begins, which could be a blow
to the reputation of US President Joe Biden.
He has repeatedly called on oil companies to use record profits to increase supply and help lower fuel prices
.
Biden last week threatened a windfall profits tax
if the industry did not increase investment.

The U.
S.
shale gas boom ushered in an era of relatively low energy costs, adding more crude oil to the global market than Iraq and Iran combined between 2012 and 2020, and the United States became the largest oil and gas producer
.

But since the outbreak of the coronavirus pandemic, the rebound in U.
S.
production has been lackluster
.
The EIA said Tuesday that this year's average output will reach 11.
83 million barrels
per day.
While this is the first increase since June, it is still about 10% below the level of February 2020, when the pandemic triggered a demand collapse and massive production
cuts.

U.
S.
shale producers point to rising costs as one
of the reasons for slow production increases.
In a results conference call this past week, energy executives warned about the impact of supply chain issues
.
On November 3, ConocoPhillips CEO Ryan Lance said the current limited supply of labor and equipment "limits the pace of development of the industry.
"

Soaring prices for oilfield products such as pipelines, steel casings and frac sand have put pressure
on producers.
Growth in the U.
S.
oil rig count has slowed since July, and inventories of drilled unfinished wells (DUCs), which surged during the height of the pandemic, are now largely depleted
.

But the biggest factor behind the slowdown is shale companies' commitment to capital discipline, which is the stark contrast to the previous decade, when they tended to raise production
at all costs in the face of high oil prices.

The new shale gas business model brings benefits
to shareholders.
Shares of U.
S.
oil and gas stocks are at record highs, and companies are spending billions of dollars
on share buybacks and dividends.
But that has heightened tensions with the White House, which has repeatedly pleaded with the industry this year to boost production
.

Hunter Kornfeind, oil market analyst at Rapidan Energy Group, said:

"Capital discipline will be the main constraint
on output.
There are downside risks
to production due to inflationary pressures and capital discipline.
I don't think this situation will subside
next year.
”