U.S. crude oil production in 2018 was expected to grow at a slower rate than previously forecast amid lower crude prices, according to a monthly U.S. government report on Aug. 7.
U.S. crude production has climbed dramatically, fueled largely by increased output from shale formations, but may now rise more slowly as prices drop.
Output was expected to rise 1.31 million barrels per day (MMbbl/d) to 10.68 MMbbl/d in 2018, lower than June’s forecast of growth of 1.44 MMbbl/d to 10.79 MMbbl/d, according to the U.S. Energy Information Administration (EIA).
The agency slightly increased its expectation for 2019 production growth to 1.02 MMbbl/d from 1.01 MMbbl/d previously. The agency expects crude production to average 11.7 MMbbl/d in 2019, compared with 11.8 MMbbl/d previously.
Shale output helped to boost U.S. production over 10 MMbbl/d this year for the first time since the 1970s. The agency had previously expected crude output to average more than 12 MMbbl/d by the fourth quarter of 2019, but revised that quarterly average downward to 11.94 MMbbl/d.
Higher production from Russia and members of OPEC has put downward pressure on crude oil prices in recent weeks, the agency said.
“We continue to expect Brent crude oil spot prices to fall towards $70 per barrel by the end of 2018, as the market appears to be fairly balanced in the coming months,” EIA Administrator Linda Capuano said. Global benchmark Brent crude was trading at $74.44 per barrel at 11:32 p.m. CST.
The agency said U.S. oil demand growth was expected to be 470,000 bbl/d in 2018, unchanged from its previous forecast. Demand growth is expected to rise 290,000 bbl/d in 2019, compared with 330,000 bbl/d previously expected.
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