The U.S. Energy Information Administration has released a report showing U.S. domestic output will continue to increase into next year. The agency's most recent expectation is for domestic production to rise by 850,000 bpd, reaching a total of around 9.4 million. This is a slight reduction from last month's estimated growth of a 960,000 bpd rise next year.
The price for Brent crude, the sweet light oil that serves as a benchmark, is also expected to fall to an average of $83 a barrel, an $18 reduction from last month's projection.
"Lower crude oil prices may curb drilling activity in some lower-producing U.S. basins, but total domestic oil production should continue to increase through next year as crude prices will be high enough to support most drilling in key shale plays," EIA Administrator Adam Sieminski said in a statement. "Continued growth in global oil supply in the face of weak oil demand will push crude prices lower in the near-term."
October saw U.S. crude oil production average 8.9 million bpd, and December is expected to see production top 9 million bpd. If this proves to be the case, it will mark the third successive year of 1 million bpd growth, industry news source Rigzone explains.
This news arrives as a number of brokerages have cut their forecasts for crude in recent weeks as downward pressure on oil prices have emanated from Saudi Arabia.
Considering the current dynamic nature of the marketplace, organizations may benefit from oil and gas strategy consulting to be better prepared for any eventuality.