Offshore Gulf of Mexico production largely drives US crude oil production growth in 2017 and 2018, according to US Energy Information Administration's outlook.
U.S. crude oil production will grow modestly this year and in 2018, keeping prices for the commodity in the low $50s per barrel, according to research from the U.S. Energy Information Administration.
The agency released its first Short-Term Energy Outlook for the year on Tuesday and highlighted that Brent pricing would average $1 per barrel more than West Texas Intermediate (WTI) prices for both 2017 and 2018. That renders the WTI average at $52 per barrel in 2017, followed by $55 per barrel in 2018.
OPEC production cuts announced in November kept December oil prices above $50 per barrel for the first time since mid-2015, and confidence in the compliance with those cuts will likely support the higher prices, EIA said.
However, countries not subject to the terms – such as the United States – may increase production, which could delay consistent global inventory withdrawals until the second half of 2018.
“Uncertainty in the production response from Libya, Nigeria, and the United States in the coming months presents some of the largest risks to the timeline of oil market rebalancing,” EIA said in the report.
During a presentation at Columbia University in December, OPEC Secretary General Mohammad Sanusi Barkindo seemed to suggest the United States and other producing nations should also pledge to limit oil production to achieve price stability.
“The experience of 2016 has shown us that the importance of cooperation and dialogue between all oil industry stakeholders has never been greater. We believe that our future will increasingly be one of energy interdependence. We do not live in a world of independent energy nations,” he said. “In the context of this vision, OPEC sees benefits in exploring and initiating an energy dialogue with the U.S. We believe this engagement is vitally important to all.”
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