April 9, 2019 / 5:21 PM / 11 days ago

EIA raises forecast for 2019 U.S. crude output growth

NEW YORK (Reuters) - U.S. crude oil production is expected to rise by 1.43 million barrels per day (bpd) in 2019 to average 12.39 million bpd, the U.S. Energy Information Administration (EIA) said on Tuesday, up from its previous forecast for a rise of 1.35 million bpd.

FILE PHOTO: An oil pump is seen operating in the Permian Basin near Midland, Texas, U.S. on May 3, 2017. REUTERS/Ernest Scheyder/File Photo

Output in 2020 is forecast to rise by 710,000 bpd to 13.10 million bpd, a smaller increase than the EIA previously estimated.

The latest forecast puts the U.S. back on track to reach the 13-million-bpd milestone by the second quarter of 2020.

The United States has overtaken Saudi Arabia and Russia to become the world’s biggest oil producer, thanks to a shale revolution.

“Strong growth out of Texas and New Mexico is largely behind growing U.S. crude oil production, which continues to be on pace to set new production records in three consecutive years,” said EIA Administrator Dr. Linda Capuano.

However, production growth has slowed in recent months as a price crash in the fourth quarter forced U.S. producers to curb spending and cut back on drilling plans.

Still, majors Exxon Mobil Corp and Chevron Corp are expanding in Texas’s Permian region.

Major oil companies plan to spend about 16 percent more on U.S. drilling and completions in 2019 versus last year, while independent producers expect to spend about 11 percent less in 2019, financial services firm Cowen & Co said.

For 2019, the EIA forecast U.S. oil demand to rise by 360,000 bpd to 20.81 million bpd, unchanged from its previous estimate.

The agency also estimates U.S. oil demand will rise by 250,000 bpd in 2020, up from a previous forecast of a 220,000 bpd increase.

The EIA also released its summer fuels outlook, in which it estimated the United States will be a net exporter of gasoline, including blending components, from April through the end of September this year for the first time since 1960.

The outlook expects U.S. exports of gasoline to average about 90,000 bpd during the period.

In addition, the agency said distillate consumption will approach levels not seen in the United States since before the 2008 financial crisis, assuming the forecast holds.

“Continuing economic growth will contribute to robust consumption this summer,” Capuano said.

The EIA forecast that U.S. retail gasoline prices will average $2.76 per gallon this summer, down from $2.85 per gallon in 2018.

Reporting by Devika Krishna Kumar in New York; Editing by Bernadette Baum

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