US Oil Production Outlook Improves as Estimates Increase

Brent Lewin/Bloomberg News

The Energy Information Administration bolstered its U.S. crude production outlook for 2016 and next year.

The agency boosted its domestic output forecast for 2017 to 8.51 million barrels a day from 8.31 million projected in August, according to its monthly Short-Term Energy Outlook released Sept. 6. It raised its 2016 forecast to 8.77 million barrels a day from 8.73 million.

West Texas Intermediate crude is up more than 50% since touching a 12-year low in February, encouraging a resumption of drilling in the shale patch. Producers boosted the number of rigs seeking oil during 12 of the past 14 weeks, according to Baker Hughes Inc. data.

“The decline in U.S. oil production this year and in 2017 is not expected to be as steep as in previous forecasts, because of improved drilling rig efficiencies and more rigs drilling,” EIA Administrator Adam Sieminski said in an e-mailed statement.

West Texas Intermediate crude will average $41.92 a barrel in 2016 versus the August projection of $41.16, according to the report. Prices will average $50.58 in 2017.

Brent crude, the benchmark for more than half the world’s oil, is projected to average $42.54 this year, a gain from the prior estimate of $41.60. Prices will average $51.58 in 2017, unchanged from the August report.