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Energy Preview: Crude Prices Seen Getting Hurt On Rising US Supplies
09-Nov-18   09:59 Hrs IST

Soaring shale production is putting the United States on track to hit the 12 million barrel per day or bpd oil production mark sooner than previously forecast, the Energy Information Administration (EIA) said in its November Short-Term Energy Outlook (STEO). The US crude oil output is now expected to average 12.1 million bpd in 2019, up from a forecast of 11.8 million bpd in the October STEO.

The US crude oil production reached a new monthly record of 11.3 million bpd in August 2018, exceeding 11 million bpd for the first time. Production in August was 290,000 bpd higher than expected in the October STEO, and it was this higher level that raised the baseline for the EIA's forecast for production in 2019. The EIA now sees US crude oil production hitting the 12-million-bpd mark in the second quarter of 2019 rather than the fourth quarter.

The EIA also raised its 2018 production forecast by 1.5 percent compared to the October STEO, to 10.9 million bpd, and the 2019 forecast by 2.6 percent from 11.76 million bpd to 12.06 million bpd. Following this the EIA now, it forecasts Brent Crude prices to average $72 per barrel in 2019, $3 a barrel lower than previously forecast. The EIA sees WTI Crude prices to average $65 per barrel next year, down by $5 per barrel from the previous estimate.

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