The Energy Information Administration projected that U.S. crude production in 2015 will climb to the highest level in 43 years.
Crude output rose to an average 8.3 million barrels a day in April, the most since March 1988, the EIA, the Energy Department’s statistical unit, said today in its monthly Short-Term Energy Outlook. The agency forecast output of 8.46 million this year and 9.24 million in 2015, up from 7.45 million last year. Next year’s projection would be the highest annual average since 1972.
Horizontal drilling and hydraulic fracturing, or fracking, have unlocked supplies in shale formations in North Dakota, Texas and other states. The EIA forecast that offshore Gulf of Mexico crude production will climb by 150,000 barrels a day this year and by an additional 240,000 barrels in 2015, following four consecutive years of declines.
“This is an optimistic outlook and reflects growth offshore in the Gulf of Mexico as well as shale gains,” said Sarah Emerson, managing principal of ESAI Energy Inc. in Wakefield, Massachusetts.
Total net crude-oil imports will average 7.01 million barrels a day this year, down from 7.6 million in 2013, according to the report. They will drop to 6.27 million in 2015, down 32 percent from 9.17 million in 2010.
“Higher U.S. oil production is reducing the amount of oil imported by refineries to make gasoline, diesel fuel and other petroleum products,” Adam Sieminski, the administrator of the EIA, said in a statement. “The share of U.S. liquid fuel demand that is met by net imports, which reached 60 percent in 2005, is expected to fall to 23 percent next year, the lowest level since 1970.”
West Texas Intermediate crude, the U.S. benchmark, will average $96.59 a barrel this year, up from the April projection of $95.60, the EIA said. The grade will average $90.92 in 2015, up from the previous month’s estimate of $89.75.
The EIA raised the forecast for Brent oil, the benchmark grade for more than half the world’s crude, to $106.26 for this year from $104.88. Next year’s prediction was increased to $101.92 from $100.92.
The agency lowered its forecast for global oil consumption this year to 91.56 million barrels a day from 91.61 million estimated last month. The outlook for 2014 production was reduced to 91.58 million barrels a day from 91.78 million.