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Energy Expert: US Oil Output Will Bounce Back in 2022

Daniel Yergin says output could increase 900,000 barrels per day from an estimated 11.18 million barrels this year.
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U.S. oil production is poised to rebound next year, as the U.S. interrupts OPEC’s market dominance, says veteran energy expert Daniel Yergin.

“The U.S. is back,” the vice chairman of IHS Markit told CNBC. “For the last year, it’s been OPEC+ running the show. But U.S. production is coming back already, and it’s going to come back more in 2022.”

After hitting 12.29 million barrels per day in 2019, U.S. oil output dropped 8% to 11.28 million barrels last year and is estimated at 11.18 million barrels for 2021 and 11.85 million barrels for next year, according to the U.S. Energy Information Administration.

But Yergin said production could gain as much as 900,000 barrels per day next year. He said he was on two calls where U.S. Energy Secretary Jennifer Granholm asked oil companies boost output.

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“That, of course, is because the Biden administration is so deeply concerned about inflation, and about its political impacts,” he said.

Yergin predicted oil price will fluctuate between $65 and $85 per barrel, with $100 unlikely, “unless some big geopolitical turmoil happens.”

Brent crude recently traded at $79.15, down 0.1%, and U.S. crude at $76.59, up 0.04%.

When it comes to oil stocks, Morningstar analyst Allen Good likes Chevron. “We expect Chevron to deliver higher returns and margin expansion thanks to an oil-leveraged portfolio as well as the next phase of growth, which is focused on developing its large, advantaged Permian Basin position,” he wrote in a commentary last month.