EIA Anticipates High Energy Production Levels
The EIA on the 11th April released a short term energy output, predicting a fast rise, both in American’s energy production and imports. Predictions made by the agency on United States energy outlook are in most cases bullish. There are indications that the agency expects a rise in prices of natural gas. This points to the fact that in the short term, the agency expects demand to exceed supply.
From the EIA report, the United States average oil production in 2016 is estimated at 8.9 million barrels per day. By projection, the agency estimated U.S 2017 oil production around 9.2 million barrels per day and 9.9 million for 2018. This is an increase of 11% within two years.
As the production of natural gas declined last year, IEA expects gas production increase by 0.8 billion cubic feet per day.
There is expectation that higher prices in natural gas will rise from $2.88 of last year to $3.10 in 2017 while in 2018, there is an increased expectation of $3.45 which will likely result in decline in electricity supply through shortage of natural gas. It is amazing that natural gas has been predicted to fall from 34% to 32% next year.
Also, coal is expected to increase from 30% to 31%. Increment from 9% to 19% is also expected in non hydro power renewable energy (solar and wind).
As for crude oil prices, WTI has been predicted by the EIA report to stay at $52 in 2017 while it increases to $55.10 in 2018.
More so, a rise from $2.23/ gallon in 2016 to $2.46/ gallon in 2017 is expected from the Unites States domestic gas prices.
Activity in the Gulf of Mexico (GOM) was also covered by the EIA report. GOM surpassed the high set in 2009 with 1.6 million barrels per day annual high for 2016. It is expected that GOM oil production increases to 1.7 million barrels per day in 2017 and 1.9 million barrels per day in 2018.
On total United States crude oil imports which noticeably rose for the first time in many years, IEA reported that it increased by 514 million barrels of oil per day and reached 7.9 mmbop/d. This is still lower than the 10.1mmbop/d peak reached in 2005. Majority of the United States crude imports are from Canada.
