In its monthly report, the US Energy Information Administration says US crude output is expected to average 12.06 million barrels per day (b/d) by mid-2019. Anadarko photo.
US crude output expected to average 12.06 million b/d in 2019
The US Energy Information Administration forecasts US crude output to hit 12.06 million barrels per day (b/d) by mid-2019, mostly due to surging shale production.
On Tuesday, the agency released its monthly report which predicts US production to increase by 1.16 million b/d, higher than the previous forecast for an increase of 1.02 million b/d.
The rise in output over 12 million b/d is expected to occur in the second quarter of next year, sooner than the agency’s previous estimate of fourth quarter, 2019.
This year, output is expected to increase by 1.55 million b/d to 10.90 million b/d, up from an earlier estimate of an increase of 1.39 million b/d.
The US shale revolution has boosted crude production to record highs.
In recent months, pipeline bottlenecks have stranded some crude in the Permian Basin, but “industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue to grow at a higher rate than EIA expected,” the EIA wrote in its report.
The Bakken has also reported new record outputs.
EIA Administrator Linda Cauano said “US crude oil production reached a record milestone in August 2018, when it exceeded 11 million barrels per day for the first time”.
“US production has exceeded EIA’s previous expectations and, as a result, the short-term outlook now forecasts US crude oil production to exceed 12 million barrels per day in 2019.”
On the demand side, in 2018, the EIA predicts US crude demand to increase by 510,000 b/d to 20.47 million b/d. This is slightly higher than its previous forecast of an increase in demand of 450,000 b/d to 20.41 million b/d.
By 2019, the agency predicts US crude oil demand to increase by 220,000 b/d, a slight downward revision from its previous estimate of an increase of 230,000 b/d.
Trade tensions between the US and China and currency weaknesses pressuring economies in Asia have caused concern about the global crude demand outlook.
On Tuesday, oil prices fell by 1.5 per cent and, at one point in the session, dropped to their lowest point since early April.