EIA Expects US Crude Production to Decline
Published on 11 Dec, 2015
In its latest Short-Term Energy Outlook, the US EIA expects American crude production to decline by 0.5 million barrels per day (mbpd) to average 8.8mbpd.
It estimates that total US crude production declined by about 60,000 barrels per day (bpd) during the month of November as compared to the previous month. In April this year, US crude production peaked at 9.6mbpd before it began falling in May, averaging out at an estimated 9.2mbpd in November.
The decline in production over 2015 and 2016 is attributable to low global crude prices, which made production from emerging and mature onshore fields as well as from shale assets unattractive. Low prices have impacted oil exploration companies’ investment plans, which may resurge only after oil prices show some signs of revival.
Low US crude production may not impact the global oil balance in 2016, with OPEC likely to keep the oil market well supplied - supplemented further by global oil inventories.
Additionally, the lifting of sanctions on Iranian crude will bolster global oil supply.
With abundance in supply, oil prices aren't likely to see major surges during 2016. The outlook seems muted for the moment, with significant jump in prices unlikely aberrations.