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EIA cuts 2015, 2016 U.S. crude oil production growth forecasts

NEW YORK – The U.S. government on Tuesday lowered its 2015 and 2016 crude oil production growth forecasts amid lower prices and fewer active drilling rigs.

In its short term energy outlook, the U.S. Energy Information Administration lowered its 2015 crude oil production growth forecast to 530,000 barrels per day (bpd) from 550,000 bpd, while 2016 growth was seen at 20,000 bpd, down from 80,000 bpd previously.

Meanwhile, it raised its 2015 U.S. oil demand growth forecast to 340,000 bpd vs 330,000 bpd seen last month and cut its 2016 demand growth forecast to 70,000 bpd from 90,000 bpd previously.

Since last June, U.S. producers have reacted quickly to a nearly 60 percent drop in prices by cutting spending, eliminating jobs and idling more than a half of the country’s rigs. Active oil rigs last week declined for the 22nd week in a row, Baker Hughes reported.

Still, “while there are fewer rigs drilling for crude, U.S. oil production this year is still on track to be the highest in more than four decades,” EIA Administrator Adam Sieminski said in a statement.

The EIA added that U.S. crude oil production averaged some 9.3 million bpd in March, but is expected to decline from June through September before growth resumes.

The EIA’s report comes after the Organization of the Petroleum Exporting Countries said that its oil output rose further in April while demand for its oil would be 50,000 bpd higher than previously thought.

OPEC cut its forecast for the growth in U.S. oil output this year by 40,000 bpd to 700,000 bpd. It left the estimate for all non-OPEC countries’ supply growth unchanged.

In related news, U.S. crude stocks build less than expected as Cushing draws – EIA.

(Reporting By Catherine Ngai; Editing by Marguerita Choy)

This article was from Reuters and was legally licensed through the NewsCred publisher network.