The U.S. Energy Information Administration said on Wednesday that it has boosted its 2018 U.S. crude production forecast.
The agency’s latest Short Term Outlook bumped its U.S. oil production forecast for 2018 up to 9.5 million barrels per day, up from last month’s estimate of 9.3 million bpd.
The agency said that U.S. crude oil production averaged an estimated 8.9 million bpd in 2016.
The agency’s U.S crude oil production for 2017 was unchanged at an average 9 million bpd.
The EIA found that implied global petroleum and liquid fuels inventories grew by an estimated 800,000 bpd in 2016.
The agency expects the oil market to be “relatively balanced” in 2017 and 2018.
The EIA has forecast inventories to draw down by an average 100,000 bpd in 2017.
Inventories are then expected to build by an average 200,000 bpd in 2018.
The EIA said that it revised down its estimated inventory build was tied to “changes to estimates of historical global liquid fuels consumption that created a higher base for consumption during recent years and the forecast period.”
EIA forecasts Brent crude oil prices to average $55 per barrel in 2017 and $57 per barrel in 2018.
West Texas Intermediate (WTI) crude oil prices are forecast to average about $1 per barrel less than Brent prices in 2017.
U.S. dry natural gas production is forecast to average 73.7 billion cubic feet per day (Bcf/d) in 2017, a 1.3 Bcf/d increase from the 2016 level.
The EIA said that those gains reverse a 2016 production decline that was the first decline since 2005.
The agency expects 2018 natural gas production to increase by an average of 4.1 Bcf/d from the 2017 level.
Average Henry Hub natural gas spot prices fell by 29 cents per million British thermal units (MMBtu) from December levels to $3.30/MMBtu in January.
The EIA expects Henry Hub natural gas spot price to rise from an average of $3.43/MMBtu in 2017 to $3.70/MMBtu in 2018.
The agency said that the Henry Hub spot price boost is tied to growing natural gas-fired electric generation capacity, growing domestic natural gas consumption and new export capabilities.