- Gasoline price seen falling to $2.03 a gallon by December
- Brent crude price projections trimmed for this year, 2016
The collapse of oil prices will have a slightly bigger impact on U.S. crude production this year and the next than previously estimated, the Energy Information Administration said.
The agency reduced its output forecast for this year by 1.5 percent to 9.22 million barrels a day, according to its monthly Short-Term Energy Outlook. It cut the 2016 forecast to 8.82 million from 8.96 million last month.
“U.S. monthly crude oil production is expected to decline through the middle of next year in response to low oil prices,” EIA Administrator Adam Sieminski said in an e-mailed statement. “Current low oil prices are making some U.S. oil production less profitable.”
America’s shale drillers have sidelined more than half their oil rigs since October as they confront tumbling prices. For U.S. drivers, the low prices mean they’ll pay less for gasoline at the pump, with average prices in the country falling to $2.03 a gallon by December, according to the report.
That would be a 17 percent decline from average gasoline prices of $2.437 a gallon on Sept. 7, according to EIA data.
The EIA trimmed its U.S. production forecast for the first five months of the year as it switches to a new survey, the agency said Aug. 31. The U.S. pumped about 9.44 million barrels of crude a day during the period, down from a previous estimate of an average 9.53 million.
"Despite the expected decline in monthly crude oil production, U.S. total output this year is forecast to be the highest since 1972," Sieminski said.
Output will begin rising in late 2016 as oil prices are forecast to move higher, according to the report.
West Texas Intermediate, the grade traded on the New York Mercantile Exchange, will average $49.23 a barrel this year, according to the report.
The estimate was cut from $49.62 in August.
The EIA reduced its 2015 estimate for Brent crude, the benchmark for more than half the world’s oil, to $54.07 from $54.40.
For the year, gasoline at U.S. pumps will average $2.41 a gallon, unchanged from last month’s report.