U.S. oil output could near 1970 record next year, EIA says

The Energy Department believes another burst of shale drilling could push U.S. oil production close to an all-time record by the end of next year.

The return of drilling rigs and roustabouts to U.S. shale fields could lift the nation’s daily crude output to 10.1 million barrels by the fourth quarter of 2018, just 30,000 barrels under the November 1970 record, the Energy Information Administration said Tuesday.

Such a feat would mean domestic oil producers would have to put out an additional 1.2 million barrels a day over the next two years, up from the current 8.96 million barrels a day.

The EIA said that would contribute to a rise in global output to more than 100 million barrels a day by the second quarter of 2018, up 3.4 percent from current levels. The bulk of that growth, it believes, would come from outside of OPEC.

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The EIA revised its forecast for U.S. oil production up by around 2 percent for 2018, and it increased its projection for the fourth quarter of 2017 up about 1 percent.

It pointed to higher levels of oil field spending. In the fourth quarter of 2016, investments by more than three dozen oil companies rose 72 percent, or nearly $5 billion, compared with the same period the year before. And spending continued to rise in the first quarter.

The EIA believes that burst of oil could weigh on oil prices. It now expects U.S. oil prices to average $52.24 a barrel this year, down 2.3 percent from its previous projection. It also revised its forecast for next year’s oil prices down 1.9 percent to $55.10 a barrel.