The Energy Information Administration’s (EIA) Short-Term Energy Outlook showed that oil production would reach an average of 10.27 million bpd in 2018 and 10.85 million bpd in 2019. The two estimates would erase the record production of 10.04 million bpd in 1970.
Storage tank fabrication will then be more in demand in the U.S. due to this record increase, especially when output would surpass 10 million barrels per day (bpd).
By November next year, oil producers in the country would tally 11 million bpd. The EIA attributed the projected growth to growing shale production in North America, particularly in 2017 when output rose around 5%.
John Conti, an EIA acting administrator, said that the Permian Basin in the U.S. and new oil sands projects in Canada will lead a non-OPEC production of oil through the end of next year. Elsewhere, the agency lifted its forecast growth in 2018 for global oil output and demand, which would reach 100.34 million bpd and 100.11 million bpd, respectively.
Russia and Saudi Arabia comprised the two countries that produce more crude oil than the U.S., reaching more than 11 million bpd and around 10.7 million bpd, respectively, in the previous years. While rising production creates issues on higher supply than demand, Conti believes that “major risk factors would be more global in nature.”
He expects the U.S. market to be aligned based on moderate prices and more opportunities for production. Crude oil prices closed at $62.96 per barrel on Jan. 9, which was the most expensive since December 2014.
It remains to be seen whether the EIA’s forecast growth will happen in the next two years or not. However, energy producers still need to invest in storage solutions as a precaution. Do you think crude oil production will increase in the near future?