The U.S. Energy Information Administration (EIA) said on Wednesday that U.S. oil production is expected to continue climbing into 2018.
The EIA is now forecasting U.S. crude production to average 9 million bpd in 2017, up from a previous estimate of 8.7 million bpd.
The agency expects U.S. crude production to climb to 9.3 million bpd in 2018.
The EIA said the forecast increases largely reflect production boosts in the Gulf of Mexico.
Rising tight oil production along with increasing drilling activity and well-level productivity also contributed to the upwards revision.
U.S. crude production hit an average of 8.9 million in barrels per day in 2016, the agency said.
The EIA expects total non-OPEC production to grow by 400,000 bpd in 2017 and rise by 700,000 bpd in 2018.
Dry natural gas production declined by 2.4 percent year-over-year in 2016 to an average 2.4 billion cubic feet per day (Bcf/d).
That decline marked the first annual average natural gas production decline since 2005.
The EIA expects dry natural gas production to rise by an average of 1.4 Bcf/d in 2017 and by 2.8 Bcf/d in 2018.
The agency also revised its Brent crude price forecast upwards.
Brent crude oil prices are now forecast to average $53 per barrel in 2017, up from the agency’s previous forecast of $51 per barrel.
The EIA expects Brent crude prices to continue growing into the next year and hit an average and $56 in 2018.
West Texas Intermediate (WTI) prices are expected to average about $1 per barrel less than Brent prices for the same period.
Benchmark North Sea Brent crude oil spot prices averaged $53 per barrel in December, a $9 per barrel increase from November.
December marked the first month since July 2015 that Brent spot prices averaged over $50 per barrel, the EIA said.
The EIA estimated that global petroleum and other liquid fuels inventory builds averaged 900,000 bpd in 2016, marking the third straight year of inventory builds.
The agency expects the pace of inventory builds to “slow considerably” to an annual average of 300,000 bpd in 2017 and 100,000 bpd in 2018.
The EIA said that inventories are forecast to post an average 100,000 bpd draw during the second half of 2018.
Continuing global oil inventory builds are expected to keep crude prices below the $60 per barrel mark through the end of 2018, the EIA added.
The EIA estimates that OECD commercial crude oil and other liquid fuels inventories stood at 3.10 billion barrels at the end of 2016, equivalent to about 66 days of consumption.
The agency expects OECD inventories to rise to 3.13 billion barrels at the end of 2017 and to 3.16 billion barrels at the end of 2018.