The U.S. Energy Information Administration has revised its crude production forecast for 2017 up slightly as the U.S. rig count continues to rise.
The agency said in its latest short-term energy outlook that it expects U.S. crude oil production to average 8.7 million barrels per day (bpd) in 2017, up by 100,000 bpd from last month’s forecast.
The agency expects U.S. crude production to average 8.8 million bpd this year, down from an average of 9.4 million bpd in 2015.
Global oil inventory builds are forecast to average 800,00 bpd in 2016 and 500,000 bpd in 2017.
EIA expects Brent crude oil prices to average close to $48 per barrel in the fourth quarter of 2016 and in the first quarter of 2017.
The agency expects Brent prices average $43 per barrel in 2016 and $51 per barrel in 2017.
West Texas Intermediate (WTI) crude oil prices are forecast to average about $1 per barrel less than Brent prices in 2017.
Natural gas marketed production is forecast to average 77.3 billion cubic feet per day (Bcf/d) in 2016, a 1.4 Bcf/d decline from 2015 levels.
That decline would mark the first annual decline since 2005.
EIA expects natural gas production to start growing in November thanks to a spike in drilling activity and infrastructure build-out.
The agency expect natural gas production to grow by 2.9 Bcf/d in 2017 compared to the 2016 level.
The EIA expects growing domestic natural gas consumption, along with growing pipeline exports to Mexico and liquefied natural gas exports, to boost Henry Hub natural gas spot price from an average of $2.50/million British thermal units (MMBtu) in 2016 to $3.12/MMBtu in 2017.