US Crude Oil Output to Decline by 570,000 bpd in 2016
The U.S. government on Tuesday raised its projected decline rate for crude oil production next year, furthering a year-long rout that has pressured benchmark prices to near a seven-year low.
In its short term energy outlook, the U.S. Energy Information Administration said that production in 2016 would fall by 570,000 barrels per day (bpd) to 8.76 million bpd. A month ago, the cut was expected to be 520,000 bpd.
The cuts come after U.S. energy firms last week cut oil rigs for the 13th week in the last 14, a sign that many drillers were holding off on returning to the well pad, data from oil services company Baker Hughes showed.
But even with the decline, production should remain resilient in some regions, according to EIA Administrator Adam Sieminski.
"While U.S. monthly onshore oil production is expected to continue declining through most of next year, oil output in the Gulf of Mexico is on track to steadily rise," he said in a statement.
The 2015 crude oil output growth forecast was raised to 630,000 bpd of growth, from 580,000 bpd of growth previously.
The expected fall in production next year coincides with an expectation of higher demand. The EIA raised its 2016 U.S. oil demand growth forecast to 160,000 bpd from a 120,000 bpd growth previously, according to the report. The 2015 U.S. oil demand growth, however, was set to increase by 290,000 bpd from 330,000 bpd previously.
(Reporting by Catherine Ngai; Editing by Marguerita Choy)
