EIA Raises U.S. Oil Output Growth Forecast for 2018

March 6, 2018

NEW YORK (Reuters) – The U.S. government said on Tuesday it expects domestic crude production in 2018 to rise over 120,000 barrels per day (bpd) more than previously expected as shale output surges.

Shale production in the U.S. has increased rapidly with improvements in drilling techniques, spurred on by a recovery in international oil prices.

Production has grown more quickly than expected by the most authoritative forecasting bodies in the global energy industry, making the U.S. a bigger oil producer than top OPEC supplier, Saudi Arabia.

Monthly production shattered a 47-year output record in November, rising to 10.057 million bpd.

The U.S. Energy Information Administration expects U.S. crude output in the fourth quarter of 2018 to reach an average of 11.17 million bpd, up from the previous forecast a month ago of 11.04 million bpd.

Last month, the EIA forecast U.S. output would hit 11 million bpd a year earlier than it had previously expected.

For 2019, the EIA forecast a crude production increase of 570,000 bpd to 11.27 million bpd.

In its monthly short-term energy outlook, the agency forecast that average full-year U.S. crude oil output would rise by 1.38 million barrels per day (bpd) to 10.70 million bpd this year.

That would break the previous average annual record of 9.6 million bpd hit in 1970.

Last month, the EIA forecast a year-over-year increase of 1.26 million bpd to 10.59 million bpd in 2018.

The world’s largest oil producers appealed to U.S. shale producers to join their efforts to keep global oil prices around current levels at an industry gathering in Houston this week. Rising U.S. output has undercut OPEC’s efforts to end a global oil glut.

Meanwhile, the agency forecast that U.S. oil demand for 2018is set to grow by 470,000 bpd, compared to its previous forecast of 450,000 bpd.

For 2019, oil demand is expected to rise by 360,000 bpd versus a previous forecast of 350,000 bpd.

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