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U.S. crude oil production has been on a steady incline since bottoming out in mid-2016. Despite oil prices hovering around $50 per barrel for most of 2017 — less than half of what it was before crashing in 2014 — crude production is expected to return to those pre-price decline levels by the end of the year.
Crude Production Rising
U.S. crude oil production averaged an estimated 8.9 million barrels per day (bpd) in 2016 and is forecast to average 9.3 million bpd in 2017. The U.S. Energy Information Administration (EIA) forecasts production to average 9.9 million bpd in 2018, which would mark the highest annual average production in U.S. history, surpassing the previous record of 9.6 million bpd set in 1970.
Oil Prices Flat
Brent crude oil prices are forecast to average $51 per barrel in 2017 and $52 per barrel in 2018. Average West Texas Intermediate (WTI) crude oil prices are forecast to be $2 per barrel lower than the Brent price in both 2017 and 2018. NYMEX contract values for October 2017 delivery that traded during the five-day period ending July 6 suggest that a range of $36 per barrel to $60 per barrel encompasses the market expectation for WTI prices in October 2017 at the 95 percent confidence level.
Gas Production Rising
Dry natural gas production is forecast to average 73.3 billion cubic feet per day (Bcf/d) in 2017, a 1 Bcf/d increase from the 2016 level. Forecast dry natural gas production increases by an average of 3.1 Bcf/d in 2018. This increase reverses a 2016 production decline, which was the first annual decline since 2005. Natural gas production in 2018 is forecast to be 4 Bcf/d above the 2017 level.
Tags: August 2017 Print Issue
Source: U.S. Energy Information Administration, Short-Term Energy Outlook, July 11, 2017, eia.com