NEW YORK (Reuters) -U.S. oil production is expected to hit a larger record this year than previously expected, the Energy Information Administration said on Tuesday, even as the agency warned that a glut of oil will weigh on prices in the months ahead.
The Department of Energy’s statistical arm expects U.S. oil production to average 13.53 million barrels per day this year, up from its prior forecast of 13.44 million bpd. Oil output averaged 13.23 bpd last year, which was the prior record.
The anticipated surge in U.S. output defies growing concerns that the oil market is oversupplied, with the EIA noting that it expects crude oil inventories to rise throughout next year and put significant downward pressure on prices in the months ahead.
U.S. West Texas Intermediate crude prices are expected to average around $65 a barrel this year, the EIA said, a 15% decline from last year. Brent crude oil prices are expected to average around $68.64 a barrel, down nearly 15% from last year, the EIA said.
The revision to EIA’s U.S. oil output forecast was due to higher production in July than the agency had previously estimated, it said. The EIA also raised its forecasts for production from the offshore U.S. Gulf region, noting that some projects there are ramping up faster than it expected.
The offshore Gulf is expected to be the main beneficiary of U.S. President Donald Trump’s efforts to deregulate the energy industry in his bid to unleash more domestic output. The EIA said it expects offshore U.S. Gulf oil output to average 1.89 million bpd this year, up from its earlier forecast of 1.84 million bpd.
(Reporting by Shariq Khan and Scott DiSavino in New YorkEditing by Rod Nickel)
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