December 12, 2017 / 6:16 PM / 2 years ago

EIA raises 2018 U.S. oil output forecast to highest on record

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson/File Photo

NEW YORK (Reuters) - The U.S. Energy Information Administration said on Tuesday that the 2018 average oil production rate will hit the highest level for any year on record in the United States.

In its monthly short-term energy outlook, the agency forecast that U.S. crude oil output will rise by 780,000 barrels per day (bpd) to 10.02 million bpd in 2018. Last month, it expected a 720,000 bpd year-over-year increase to 9.95 million bpd.

Output will only top 10 million bpd in the fourth quarter of 2018, however.

The forecast for stronger output comes as global oil prices topped $65 a barrel on Tuesday, the strongest since June 2015, driven by continued supply curbs from OPEC and an outage on a key North Sea pipeline.

But analysts and traders say the increase in U.S. supply may put some downward pressure on prices next year, especially if demand fails to keep up.

The EIA also forecast that 2017 crude oil production will rise by 380,000 bpd from 370,000 bpd previously.

The agency added that U.S. oil demand for 2017 is on course to grow by 160,000 bpd, unchanged from its previous forecast. For 2018, oil demand growth was also unchanged at 410,000 bpd.

Reporting by Catherine Ngai; Editing by Chizu Nomiyama and Tom Brown

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