The U.S. Energy Information Administration on Tuesday cut its outlook for oil prices and trimmed its forecast for how much oil U.S. drillers will pump next year.
EIA now sees U.S. West Texas Intermediate crude averaging $48.95 this year, down from last month's forecast for $50.78. The agency also tempered its outlook for 2018, knocking its WTI forecast down to $49.58 from $53.61.
The price cut follows a series of downward revisions to oil prices by investment banks.
The expectation for lower prices will drag on U.S. oil production in 2018, according to EIA. Last month, EIA forecast U.S. drillers would produce 10 million barrels a day in 2018. On Tuesday, it said the nation would pump 9.9 million barrels a day — still the highest annual average output on record.
"A lower forecast for crude oil prices is expected to shave a little off projected growth in U.S. oil production next year compared with the previous forecast, but annual output is still on track to reach a record high in 2018," U.S. EIA acting administrator Howard Gruenspecht said in a statement.