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US Crude Oil Production Growth Forecast: Tight Oil Driving Growth

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US crude oil production forecast for 2018

The EIA (U.S. Energy Information Administration) has forecast that US crude oil production will average 10.7 million barrels per day this year, the highest annual average since 1970, when crude oil production averaged 9.6 million barrels per day.

Last year, crude oil production averaged 9.4 million barrels per day. Next year, the EIA expects crude oil production to average 11.9 million barrels per day and US crude oil production to end the year at over 12 million barrels per day.

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Tight oil contributing to US crude oil growth

The EIA expects US tight oil production to account for almost 70% of total US production by 2040, when it will surpass 8.2 million barrels per day. Last year, tight oil production made up 54% of total US production. Tight oil is oil that’s been extracted from impermeable shale deposits such as the Permian, Eagle Ford, and Bakken using hydraulic fracturing, or “fracking.”

The EIA expects production from the Permian—specifically Spraberry, Bone Spring, and Wolfcamp— to account for 43% of total tight oil production through 2050.

Companies that hold positions in the plays mentioned above include Pioneer Natural Resources (PXD), Callon Petroleum Company (CPE), EP Energy (EPE), Marathon Oil (MRO), Apache Corporation (APA), Cimarex Energy (XEC), and Parsley Energy (PE).

In comparison, the Bakken and Eagle Ford formations will account for 20% and 17% of total tight oil production, respectively. From 2050 onward, the EIA expects tight oil production to remain relatively constant, as development will be focused on productive areas.

Next, we’ll talk about the EIA’s production forecasts for Eagle Ford.

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