US crude oil production expected to increase into 2018, EIA report says
U.S. crude oil production will average 9.4 million barrels per day (b/d) in the second half of 2017, up by more than 340,000 b/d compared to the first half of the year, according to a recent Short-Term Energy Outlook (STEO) report from the U.S. Energy Information Administration (EIA).
Production in 2018 is expected to rise to 9.9 million b/d, surpassing the previous high of 9.6 million b/d set in 1970.
The report projects that the majority of crude oil production growth in the second half of the year will be in the Permian region, which extends across west Texas and into southeastern New Mexico.
Production in the region has increased partly due to average monthly crude oil prices in the West Texas Intermediate (WTI), which has remained higher than $45 per barrel since the second half of 2016.
EIA said that its STEO forecast is based on recent trends in drilling and production on anticipated future changes, driven largely by the WTI crude oil price. Past production trends are also evaluated on a well-by-well basis for all production since 2014 to estimate future well performance and production decline rates at the state and regional levels.
The report noted that within the contiguous United States, rig counts typically follow changes in the WTI price with an approximate four-month lag and that changes in the number of active rigs lead to changes in production volumes within approximately two months.
