Could Permian Basin Drive Growth in US Crude Oil Production?
In its November Short-Term Energy Outlook (or STEO) report, the EIA forecast that US crude oil production in 2017 would average 9.2 million barrels per day.
Dec. 15 2017, Updated 7:11 a.m. ET
US shale oil production
In its November Short-Term Energy Outlook (or STEO) report, the EIA (U.S. Energy Information Administration) forecast that US crude oil production in 2017 would average 9.2 million barrels per day. For 2018, the EIA forecasts crude oil production to average 9.9 million barrels per day, which would mark the highest annual average production, surpassing the previous record set in 1970 when crude oil production averaged 9.6 million barrels per day.
Permian and Gulf of Mexico to drive growth
Most of the growth is forecast to come from the Permian Basin and the Gulf of Mexico. In its previous STEO report released in June, the EIA forecast that the Permian region would produce 2.9 million barrels per day of crude oil by the end of 2018, or almost 30% of the total US crude oil production.
As we can see in the above chart, Permian production is expected to increase by 515,000 barrels per day between June 2017 and December 2018. Production in the Gulf of Mexico is forecast to increase 344,000 barrels per day in the same period.
Key Permian players include Chevron (CVX), Apache (APA), and Concho Resources (CXO). Top players in the Gulf of Mexico include Anadarko Petroleum (APC), Noble Energy (NBL), and Hess (HES).
Production in the Permian Basin has increased despite a low oil price environment in the first half of 2017. In the next part, we’ll take a closer look at recent Permian production growth forecasts.