U.S. crude oil production is expected to average more than 12 million barrels per day (MMbbl/d) late next year for the first time ever, the U.S. Energy Information Administration (EIA) said in a monthly report on July 10.
U.S. oil production has soared, boosted by improved technology for tapping shale formations. Output rose 5.6% last year and is expected to grow 15.4% this year. If the forecasts are realized, that will make the U.S. the world's largest crude producer, surpassing Russia.
"Production growth in the United States, Brazil, Canada, and Russia will make up the majority of total global supply growth in 2019," EIA Administrator Linda Capuano said in a statement after the report was released.
The agency increased its 2019 average forecast by 40,000 bbl/d to 11.8 MMbbl/d, and increased its forecast for the fourth quarter of that year by 50,000 bbl/d to 12.02 MMbbl/d.
U.S. crude production this year is expected to be 10.79 MMbbl/d, unchanged from last month's forecast, according to the agency, which is the statistical arm of the U.S. Department of Energy.
The EIA expects production to average 10.91 MMbbl/d this quarter and 11.29 million in the fourth quarter.
Total U.S. oil demand is expected to be 20.35 MMbbl/d this year, 60,000 bbl/d less than previously forecast. At the same time, the agency increased its 2019 demand outlook by 10,000 bbl/d to 20.68 MMbbl/d.
If EIA’s forecast is realized, 2019 gasoline consumption would be the highest annual average on record, surpassing the previous record set in 2017, Capuano said.
Oil well productivity in Texas's Permian Basin—the country's largest oil field—is falling, and the number of drilling rigs operating in the U.S. has declined for six straight weeks.
Oil and gas operating costs in the U.S. shale basins have come down recently following a drop in crude prices, BP’s head of upstream Bernard Looney said on Feb. 5.
Vitol said its traded crude and products volumes rose to 7.4 million barrels per day last year, up from 7.2 million in 2017.