7.2% production growth coming in 2018: EIA
The U.S. will break a 47-year record next year, according to the EIA, as shale production continues to recover from the global industry downturn.
The highest monthly production the U.S. ever achieved was 10,044 MBOPD, in November 1970. Production in March 2017, the most recent month the EIA has data for, was 9,098 MBOPD. Production has been rising since September.
Up, up, up
U.S. shale producers seem perfectly comfortable with oil at or around $50/bbl., and many producers are planning significant growth in the next year. This growth will propel the U.S. beyond its previous records in 2018, according to the EIA. The agency predicts production will average 10.01 MMBOPD next year, meaning that individual months are highly likely to exceed the 1970 record.
Overall, oil production is projected to grow by 5.2% in 2017 and 7.2% in 2018. Current activity has led the EIA to increase its projected production forecast by 0.3% and 0.4% in 2017 and 2018, respectively.
The news for natural gas production is not as encouraging, however. The EIA revised its 2017 and 2018 production estimates down by about 1% each this month. Current predictions put 2017 and 2018 production at 73.3 Bcf/d and 76.6 Bcf/d, respectively. This means production will grow by about 1.4% in 2017 and 4.5% in 2018.
Commodities prices will stay relatively stable
Prices are expected to be relatively stable in the next two years, only increasing slightly. The EIA expects WTI to stay around $50/bbl through 2018, then rise slightly. Increases will be minor, however, and the EIA predicts WTI will only rise to $56/bbl by the end of 2018. Overall, the agency predicts that prices will average $53.61/bbl in 2018, down about 2.7% from last month’s predictions.
The price of natural gas is expected to rise somewhat. The EIA expects prices around $3.50/MMBTU this winter, and forecasts similar gas prices in the winter of 2018-2019. Gas prices around $3.20/MMBTU are expected for Q3 2017. The EIA does expect higher summer prices in 2018, with ~$3.30/MMBTU predicted.
