(Adds demand and production numbers, comment from EIA, price background)
NEW YORK, May 10 (Reuters) - U.S. crude production in 2017 will decline less than previously forecast as higher oil prices encourage higher output, the Energy Information Administration said in a monthly report on Tuesday.
The statistical arm of the U.S. Department of Energy said crude production will decline by 830,000 barrels per day in 2016, in line with previous expectations, but that the decline will slow to 410,000 bpd in 2017, rather than the 560,000 bpd previously forecast.
“U.S. crude oil production in 2017 is expected to be more than 100,000 barrels per day higher than previously forecast in response to higher oil prices,” EIA Administrator Adam Sieminski said in comments released after the data.
Until last month, oil had seen one of the strongest rebounds since the financial crisis, with prices rallying nearly 80 percent from multiyear lows under $30 a barrel in the first quarter, supported by falling U.S. production, supply constraints in Libya and the Americas and a weak dollar.
The rally has since stalled at around $45 as record output by Russia and major Middle East producers renewed worries about a global glut of some 1.5 million bpd that originally drove prices down from above $100 in mid 2014.
The EIA also lifted its U.S. oil demand forecast for the second quarter of 2016 by 0.5 percent to 19.58 million bpd, and revised upwards its demand growth forecast by 0.1 percent for the entire year to 19.54 million bpd. The EIA trimmed its 2017 oil demand forecast by 0.2 percent to 19.66 million bpd.
Demand from other regions may offset the U.S. demand shift, Sieminski said.
“Higher oil demand in China and India will contribute to a drawdown in global oil inventories during the second half of 2017.” (Reporting By Jessica Resnick-Ault; Editing by Marguerita Choy)