American oil drillers' output could top Saudi Arabia and rival Russia by 2019, US forecast shows
- U.S. oil production will average 10.8 million barrels a day in 2019, according to the Energy Information Administration, a level that will rival top producers Saudi Arabia and Russia.
- EIA sees America's output at 10.3 million barrels a day this year, the highest annual average on record.
- EIA forecasts U.S. crude prices will average $52.77 this year, well below the current price near $63 a barrel.
American drillers will pump enough oil in 2019 to potentially surpass Saudi Arabia's output and rival the world's current top producer, Russia, according to a forecast from the U.S. Department of Energy.
The department's Energy Information Administration forecast Tuesday that U.S. oil production will average 10.8 million barrels a day in 2019, a level that would put it on par with Saudi Arabia and Russia. EIA expects American output to top 11 million barrels a day for the first time ever in November 2019.
This year, EIA sees U.S. output rising to 10.3 million barrels a day, the highest ever annual average production.
"Led by U.S. production, particularly in the Permian Basin, and new oil sands projects in Canada, non-OPEC production is forecast to continue growing through the end of 2019," EIA acting Administrator John Conti said in a statement.
"We expect to see growth near 2.0 million barrels per day in 2018 and 1.3 million barrels per day in 2019."
Russia pumped at a 30-year high of nearly 11 million barrels a day in 2017. Saudi Arabia, the world's biggest exporter, is churning out about 10 million barrels a day.
Both countries are limiting their output as part of a deal with two dozen producer nations that aims to shrink global oil stockpiles and prop up prices.
However, the United States would still be on track to rival the world's top producers in about two years.
Saudi Arabia was pumping about 10.6 million barrels a day at the end of 2016, before OPEC's production caps went into effect. Russia has room to grow, but faces sanctions on its energy industry over its annexation of Crimea, which could hold back its potential.
The surge in U.S. production is being driven by output from shale fields, where drillers use advanced methods like hydraulic fracturing to squeeze oil and gas from tight rock formations.
"EIA forecasts U.S. crude oil production to grow by 980,000 barrels per day in 2018, and we expect most of that growth to come from tight rock formations in Texas and North Dakota," Conti said.
The U.S. shale boom played a major part in a historic price collapse in 2014, and the recovery from shale fields threatens to weigh on oil prices.
While hit a more than three-year high above $63 a barrel on Tuesday, EIA projects WTI will average $52.77 a barrel this year.
However, oil's recovery above $60 a barrel surprised many market watchers and some now believe demand will outstrip supply.