Increased drilling by shale producers buoyed by higher prices will slow the decline in U.S. crude production, a government forecast showed.
The Energy Information Administration raised its outlook for U.S. crude production next year, which now is estimated to fall 1.6 percent from 2016, compared to the 3 percent decline it predicted last month in its monthly Short-Term Energy Outlook. The forecast released Thursday takes into account a surge in drilling activity as crude prices rose 90 percent from lows in February.
"There’s growing optimism about shale, especially in the Permian basin," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. "It’s the dog that didn’t bark."Click here to read more.
The agency boosted its domestic output forecast for next year to 8.59 million barrels a day from 8.51 million projected in September, according to the data. It cut its 2016 forecast to 8.73 million barrels a day from 8.77 million.
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