EIA STEO: Oil output forecast to reach highest average in US history in 2018

12 Jan 2018   Oil Supply, USA

Total US crude oil production is expected to average 10.3 million b/d in 2018, up 1 million b/d from 2017. If achieved, forecast 2018 production would be the highest annual average recorded in US history, passing the 1970 record of 9.6 million b/d, according to the US Energy Information Administration’s latest Short-Term Energy Outlook. US crude oil production is forecast to rise to an average of 10.8 million b/d in 2019.  The Jan. 9 report is the first edition of EIA’s STEO to include forecasts for 2019.

Increased production from the Permian basin’s tight rock formations in Texas and New Mexico account for 800,000 b/d of the expected 1.2 million b/d of crude oil production growth from December 2017 to December 2019. Production from the region is expected to account for 32% of total US crude oil production in 2019, the report said.  EIA expects non-Organization of Petroleum Exporting Countries petroleum and other liquid fuels production to increase by 2 million b/d in 2018 and by 1.3 million b/d in 2019, with growth centered in the Americas. US production growth is forecast to average 1.5 million b/d in 2018 and 1 million b/d in 2019.

The forecast shows Canada’s petroleum and other liquid fuels production rising by 300,000 b/d in 2018 and by 200,000 b/d in 2019. Oil sands projects continue to drive production growth, with the new phases of the Horizon project adding production starting in November 2017, and the Fort Hills project, expected to come online in late 2018, forecast to add another 200,000 b/d to Canada’s output in 2019 (OGJ Online, Nov. 8, 2017). The Hebron offshore field is expected to add 100,000 b/d of production in 2019.  Brazil’s petroleum and other liquid fuels production is expected to rise by 100,000 b/d in 2018 and by 200,000 b/d in 2019. Development of presalt resources and regulatory changes serve as the main drivers of the growth that accounts for the third-highest source of non-OPEC production growth after the US and Canada. The oil-rich Santos basin, and particularly Lula field, is expected to add enough oil production in the next 2 years to offset declines in Brazil’s more mature onshore and offshore areas.  Other sources of growth for non-OPEC petroleum and other liquid fuels production in 2018 and 2019 include Kazakhstan, Norway, and Russia.

OPEC’s crude oil production is expected to average 32.7 million b/d in 2018, up from the 32.5 million b/d averaged in 2017. Provided Libya maintains the high production levels achieved near yearend 2017, EIA expects OPEC crude oil production to increase by 200,000 b/d in 2018. OPEC crude oil output will rise by an additional 300,000 b/d in 2019 as crude oil production slowly returns to levels prior to the November 2017 OPEC agreement to reduce crude oil production, the report said.

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