US crude oil production will climb to a 45-year high in 2015 before slipping next year.
US output will advance 8.6% to 9.47 million barrels a day this year, the most since 1970, the US Energy Information Administration said in its latest monthly report.
That’s a 40,000-barrel gain from what the agency projected in June. Monthly output declined in May and is expected to continue moving lower through early 2016.
“While US crude-oil production is expected to decline over the months ahead, total output in 2015 is on track to be the highest in 45 years,” EIA administrator, Adam Sieminski, was quoted by Bloomberg as saying. Horizontal drilling and hydraulic fracturing, or fracking, have unlocked supplies in shale formations in North Dakota, Texas and other states.
The number of active oil rigs in the US rose by 12 to 640 last week, ending the longest decline on record, according to data compiled by Baker Hughes. The number of active rigs is down 59% from November.
West Texas Intermediate, the US benchmark oil, will average $55.51 a barrel this year versus the June projection of $55.35, the report showed. Prices will average $62.04 next year. WTI dropped 46% last year as supply grew.
Lower Investment
The EIA reduced its 2015 Brent crude estimate to $60.22 from $60.53. The European benchmark will average $67.04 next year, the agency said.
“The forecast decline in US monthly oil production through early 2016 is the result of low oil prices, which pushed oil companies to reduce the investment in drilling that resulted in the lowest number of rigs drilling for oil in nearly five years,” Sieminski said.
