The U.S. government boosted its forecast for domestic crude output both this year and next year amid a surge in prices.
The Energy Information Administration raised its average output forecasts just as the U.S. benchmark closed above $70/bbl on Monday. The U.S. government reiterated that crude production will still top 11 MMbpd in October.
Elevated price levels have encouraged drillers to turn the taps higher. Crude production in the U.S. is already at a record-high and the oil rig count hovers at levels last seen in March 2015.
Next year, crude production is seen averaging 11.86 MMbpd, up from a prior forecast of 11.44 MMbpd, according to the EIA’s Short-Term Energy Outlook released on Tuesday. Domestic output will average 10.72 MMbpd this year, still above the 1970 record of 9.6 MMbpd and raised from a 10.69-MMbpd forecast in an April report.
The EIA decreased its forecasts for both global production and demand growth this year. Output is seen at 100.45 MMbpd, down from 100.47 million previously, with demand growth at 100.28 million, compared with 100.31 million estimated previously.
The agency sees total crude and petroleum product net imports to fall from an annual average of 3.7 MMbpd in 2017 to an average of 2.6 MMbpd in 2018 and to 1.5 MMbpd in 2019, which would be the lowest level of net imports since 1958.
The EIA also boosted its price forecasts for both WTI and Brent for this year and next.