The Energy Information Administration (EIA) recently offered a forecast of U.S crude oil production that shows an average of 9.4 million barrels per day (b/d) throughout the remainder of 2017. This total is 340,000 b/d more than in the first half of 2017, and production next year is expected to average 9.9 million b/d. This level would surpass the previous high of 9.6 million b/d set in 1970.
Over the last decade, U.S. oil production has nearly doubled. Driving this historic growth are projects in the Permian region which spreads across western Texas and southeastern New Mexico. This area is projected to increase production by 260,000 b/d in 2018. Other areas of growth will be in the Niobrara and Anadarko areas of Wyoming and Colorado where production is expected to increase by 75,000 and 42,000 b/d, respectively.
The Bakken region covering the Dakotas and Montana is also expected to increase production by about 31,000 b/d. Production levels in the Eagle Ford region of southern Texas will remain relatively flat, while rigs off the shores of the Gulf of Mexico and throughout Alaska are expected to decrease over the remainder of 2017 and into 2018.
One of the ripple effects of this increased oil production includes a forecasted drop in average gas prices from a high in September 2017 of $2.65/gallon to $2.29/gallon in December 2018. The good news for the U.S. energy market is that in addition to these increases in domestic oil production, the EIA is also forecasting that:
- U.S. coal production is expected to show a year-over-year increase of eight percent in 2017.
- Wind-generated electricity is projected to increase by about 15 percent between the end of 2016 and 2018.
- Solar energy production over that same two-year stretch is anticipated to grow by more than 36 percent.