The U.S. government on Tuesday jacked up its forecast for oil production next year by 250,000 barrels per day (bpd) as the boom in shale oil drilling continues to confound expectations of slower growth. The U.S. Energy Information Administration now expects domestic output to rise to 9.53 million bpd, growing by around 1 million bpd for a third consecutive year, according to its latest monthly short-term energy outlook. A month ago the EIA had predicted output growth would slow in 2015 to 800,000 bpd.
The U.S. shale boom has allowed producers to unlock thousands of barrels of reserves, putting the United States on course to become the largest producer of oil globally, which would dramatically reduce its dependence on imports. “Rising monthly crude oil production, which will approach 10 million barrels a day in late 2015, will help cut U.S. fuel imports next year to just 21 percent of domestic demand, the lowest level since 1968,” EIA Administrator Adam Sieminski said.
The EIA also raised forecasts for 2014 U.S. output to 8.53 million bpd from the previous estimate of 8.46 million bpd. It said U.S. growth would account for 91 percent of the 1.3 million bpd rise in global oil output next year.
U.S. crude oil production has reversed years of decline thanks to the development of shale resources, which have boosted output by more than 70 percent in six years. Production averaged 8.6 million bpd in August, the highest level since July 1986, EIA data showed. Total U.S. consumption of petroleum and other liquids was expected to dip to 18.92 million bpd in 2014 year on year, down 0.2 percent from a year earlier.
In 2015, total U.S. consumption of petroleum and liquid fuels was expected to rise by 0.8 percent to 19.08 million bpd, the EIA said. That figure is an upwards revision of 100,000 bpd from the previous forecast.
LESS NEED FOR OPEC OIL
The EIA also lowered production forecasts for Organization of the Petroleum Exporting Countries as member states adjust to accommodate growing production elsewhere. It decreased its 2014 forecast for OPEC supply by 0.2 percent to 35.77 million bpd and reduced its 2015 forecast by 0.6 percent to 35.86 million bpd.
The EIA added that while almost all of Libya’s export terminals are able to export crude as protests have stopped, major issues that incited the protests remain unresolved. As a result, it does not expect Libya’s oil production to recover to previous levels over the forecast period.
The EIA forecast that supply for non-OPEC countries will rise 0.3 percent to 25.37 million bpd in 2014 and increase 0.5 percent to 26.38 million bpd in 2015.