US crude output to cross 12 mbd in 2019, says EIA

US crude oil supply is expected to average 12.1 million barrels per day (mbd) next year, as production in the country rises faster than previously anticipated, according to the Energy Information Administration (EIA).

US crude output is set to cross the 12 mbd mark in the second quarter of 2019, compared with previous expectations that this level would be reached in Q4 2019, the agency said in its latest Short Term Energy Outlook (STEO).

Crude oil production in the US has been on the rise, reaching a new monthly record of 11.3 mbd in August this year.

“This higher level of production raised the baseline for EIA’s forecast for 2019 crude oil production, and EIA now expects US crude oil production to average 12.1 mbd in 2019, compared with a forecast of 11.8 mbd in the October STEO,” the report said.

In October, the EIA estimates that US crude oil production averaged 11.4 mbd, down slightly from September levels because of hurricane-related outages in the Gulf of Mexico.

For the year 2018, the EIA sees domestic crude production at 10.9 mbd, up 1.5 percent from the October forecast.

Meanwhile, the agency expects Brent crude oil prices to average $72 per barrel (bbl) in 2019, which is $3/bbl lower than previously forecast.

West Texas Intermediate crude oil prices are seen to average $65/bbl in 2019, $5/bbl lower than previously forecast.

“The lower crude oil price forecasts are partly the result of higher expected crude oil production in the United States in the second half of 2018 and in 2019, which is expected to contribute to growth in global oil inventory and put downward pressure on crude oil prices,” the report said.