US oil output to hit record high in 2018, says EIA

The US Energy Information Administration (EIA) on Tuesday said it expects US crude oil production to hit 10 million barrels per day (bpd) in 2018, the highest annual average production, surpassing the previous record of 9.6 million bpd set in 1970.

Total US crude oil production is forecast to average 9.2 million bpd for all of 2017, the EIA said in its monthly Short-Term Energy Outlook.

Meanwhile, the agency cut its world oil demand growth forecast for 2018  by 40,000 barrels per day to 1.62 million bpd.

The oil demand growth estimate for 2017 was raised by 80,000 bpd to 1.39 million bpd.

EIA forecasts North Sea Brent crude oil spot prices to average $57 per barrel in 2018, up from an average of $54 per barrel in 2017.

West Texas Intermediate (WTI) crude oil prices, however, are forecast to average $4 per barrel lower than Brent prices in 2018, EIA said.

US crude oil production averaged 9.7 million bpd in November, up 360,000 bpd from the October level, with most of the increase from the Gulf of Mexico, where production was 290,000 bpd higher than in October. 

Elsewhere, OPEC crude oil output is forecasted to average 32.7 million bpd in 2018. Production from the group averaged 32.5 million bpd in 2017, a 0.2 million bpd decrease from 2016 levels.

“Despite the extension of the OPEC agreement, EIA forecasts higher output from non-OPEC countries to contribute to growth in total liquid fuels supply in 2018,” the agency said.

The non-OPEC outlook is 0.1 million bpd higher than EIA’s November STEO, averaging 60.3 million bpd in 2018, which would be 1.7 million bpd higher than 2017 levels.

OPEC and a group of non-member oil producers recently agreed to extend until the end of 2018 their ongoing supply cut pact, which sees them cut production by a combined 1.8 million bpd.