EIA raised its crude production forecast for 2018 by 170,000 b/d
The agency also increased its production forecast for 2017 by 10,000 b/d over the previous estimate, to 9.22mn b/d, according to its monthly Short Term Energy Outlook (Steo).
Recent capital expenditure (capex) activity by oil companies supports EIA's expectations of higher production. Capex for 44 US onshore-focused oil production companies increased by $4.9bn between the fourth quarter of 2015 and the fourth quarter of 2016 based on public quarterly financial statements, the EIA said. This was a 72pc increase in spending, the largest year-over-year gain for any quarter by the 44 companies since 2012.
As a result of growing US supply, which has lowered domestic prices relative to international crude prices, more US oil is being exported to balance the domestic light sweet crude market.
Recent export data indicate that the marginal destination for US crude is Asia, a trend that will continue, the EIA said.
US crude exports averaged about 1.1mn b/d in February, up by about 370,000 b/d from the previous month, according to the most recent trade data from the US Census Bureau. China imported 342,000 b/d from the US, followed by Canada which took 244,000 b/d in February.
The EIA expects Brent prices to average about $54.23/bl in 2017, down by 39?/bl from the previous forecast, according to the Steo. Brent prices in 2018 should average $57.10/bl, down by 8?/bl from the previous forecast.
WTI prices are expected to average about $2/bl lower than Brent in the forecasts.
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