NEW YORK (Reuters) - U.S. crude oil production in 2018 was expected to grow at a slower rate than previously forecast amid lower crude prices according to a monthly U.S. government report on Tuesday.
U.S. crude production has climbed dramatically, fueled largely by increased output from shale formations, but may now rise more slowly as prices drop.
Output was expected to rise 1.31 million barrels per day (bpd) to 10.68 million bpd in 2018, lower than last month’s forecast of growth of 1.44 million bpd to 10.79 million, according to the U.S. Energy Information Administration.
The agency slightly increased its expectation for 2019 production growth to 1.02 million bpd from 1.01 previously. The agency expects crude production to average 11.7 million bpd in 2019, compared with 11.8 million bpd previously.
Shale output helped to U.S. production over 10 million bpd this year for the first time since the 1970s. The agency had previously expected crude output to average more than 12 million bpd by the fourth quarter of 2019, but revised that quarterly average downward to 11.94 million bpd.
Higher production from Russia and members of the Organization of the Petroleum Exporting Countries has put downward pressure on crude oil prices in recent weeks, the agency said.
“We continue to expect Brent crude oil spot prices to fall towards $70 per barrel by the end of 2018, as the market appears to be fairly balanced in the coming months,” said Linda Capuano, EIA Administrator. Global benchmark Brent crude was trading at $74.44 a barrel at 12:32 p.m. EDT (1644 GMT).
The agency said U.S. oil demand growth was expected to be 470,000 bpd in 2018, unchanged from its previous forecast. Demand growth is expected to rise 290,000 bpd in 2019, compared with 330,000 bpd previously expected.
Reporting by Jessica Resnick-Ault; Editing by James Dalgleish and Marguerita Choy