(Reuters) – The U.S. government on Tuesday forecast domestic crude production will rise even more than expected a year ago, undeterred by the worst price rout since the financial crisis.
U.S. crude oil production will peak at 10.6 million barrels per day in 2020, a million barrels more than the high forecast a year earlier, according to the annual energy outlook by the Energy Information Administration, the statistical arm of the U.S. Energy Department.
Crude production will then moderate to 9.4 million bpd in 2040, 26 percent more than expected a year ago, the agency said.
The reference case in the report forecasts Brent prices LCOc1 of $56 a barrel in 2015, rising to about $91 a barrel in 2025, $10 a barrel less than levels expected a year ago. The report uses the 2013 value of the dollar as its measure.
Despite lower prices, higher production will result mainly from increased onshore oil output, predominantly from shale formations, the agency said.
Onshore production in lower 48 states is expected to reach 5.6 million bpd in 2020 in the reference case, 34 percent more than expected a year ago.
The agency expects a faster oil drilling pace this year than it saw last year.
“Producers continue to locate and target
the sweet spots of plays currently under development,” the report said.
As production continues to boom, net imports are expected to decline as a share of domestic consumption. Net imports are expected to account for 14 percent of domestic liquid fuels consumption in 2020, compared with 26 percent seen a year ago.