The US Energy Information Administration (EIA) on Tuesday lowered its 2017 and 2018 oil production forecasts, noting that Hurricane Harvey has caused “significant disruptions” in the US energy market in recent weeks.
Total US crude oil production is expected to average 9.25 million barrels per day (mbd) in 2017, down from a forecast of 9.35 mbd last month, the EIA said in its short-term energy outlook.
In 2018, crude output is expected to hit 9.84 mbd, down from July’s forecast of 9.91 mbd. However, this figure would still mark the highest annual average production in US history, surpassing the previous record of 9.6 mbd set in 1970.
“Continuing uncertainty exists regarding the timeline for the return to normal operations for a broad range of upstream production, refining, pipeline, and terminal and distribution infrastructure,” the agency noted.
“The severity and duration of these outages create additional uncertainty about the path of energy prices in the coming weeks and months,” EIA added.
Hurricane Harvey, which hit the states of Texas and Louisiana late last month, led to closures at several major refineries, pipelines, and offshore platforms, shutting down nearly 20 percent of total US refining capacity.
According to EIA figures, US gross refinery runs averaged 14.8 mbd the week ending Sep. 1, down by 3.1 mbd from the previous week.
The agency forecasts refinery runs to average 15.3 mbd this month, down from an estimated average of 17.1 mbd in August, before increasing to 15.9 mbd in October.
The EIA’s report this month does not include any projected effects from Hurricane Irma, which made landfall in the state of Florida on Sep. 10.
Meanwhile, the agency maintained its forecast for Brent spot prices at $51 per barrel (bbl) in 2017 and $52/bbl in 2018. West Texas Intermediate (WTI) average crude oil prices are forecast to be about $2/bbl lower than Brent prices in both 2017 and 2018.
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