In its first short-term forecast for 2019, the US Energy Information Administration painted a picture of US oil output averaging 10.85 million barrels per day (bpd) over the year, with daily output hitting the 11 million bpd mark before the year is out.
EIA also raised its predicted average oil production for this year to 10.3 million bpd, almost a million more than in 2017. The agency also anticipates that production will reach 10.04 million bpd by the end of the first quarter, matching the all-time record for monthly US crude production that was set in November 1970. Previous EIA estimates had production exceeding the 10 million bps threshold in the fourth quarter.
Of the 1.2 million bpd of production growth between December 2017 and December 2019, EIA expects 800,000 of this to come from the prolific Permian Basin, where fracking has rejuvenated the US oil industry. Much of the remaining growth will likely come from federal waters in the Gulf of Mexico.
ExxonMobil, the maker of lubricants from Mobil UK stockists, announced its $20bn ‘Growing the Gulf’ initiative last year, and seven new upstream projects are also expected to come online there before 2020.
While increased US production could hinder OPEC efforts to clear the global supply glut, EIA also points to strong demand growth in the US for petroleum and other liquid fuels (2.4% and 1.7% for 2018 and 2019 respectively). The agency also predicts global consumption will rise by 1.7 million bpd in both 2018 and 2019.