Higher Oil Prices Lead to More USA Production in EIA Forecast

The U.S. Energy Information Administration (EIA) noted in its latest short term energy outlook (STEO) that “higher crude oil prices lead to more U.S. crude oil production” in its forecast.

In its March STEO, which was released earlier this month, the EIA projected that total U.S. crude oil production, including lease condensate, will average 13.61 million barrels per day in 2026 and 13.83 million barrels per day in 2027. The EIA’s previous STEO, which was released in February, forecast that total U.S. crude oil output, including lease condensate, would come in at 13.60 million barrels per day this year and 13.32 million barrels per day next year.

The EIA’s March STEO showed that 2025 U.S. crude oil output, including lease condensate, came in at 13.59 million barrels per day in 2025. In its previous STEO, the EIA highlighted that this figure stood at 13.60 million barrels per day.

“Our 2027 forecast is an upward revision of about 0.5 million barrels per day (four percent) from last month’s Short Term Energy Outlook,” the EIA highlighted in its March STEO.

“The West Texas Intermediate (WTI) crude oil price in our forecast is substantially higher than last month, averaging $74 per barrel in 2026 and $61 per barrel in 2027, compared with $53 per barrel and $49 per barrel, respectively, in the February STEO,” it added.

“Because changes in oil prices take time to affect production – moving from investment decisions to rig deployment to well completion and first oil – the effect of higher prices in our forecast is more pronounced in 2027 than in 2026, with production increasing from 13.4 million barrels per day in September 2026 to 13.8 million barrels per day in 2027,” the EIA continued.

The EIA stated in its latest report that the higher prices support increased drilling activity across most basins and noted that expanded pipeline capacity in the Permian region allows more associated natural gas to be brought to market, “further supporting oil-directed operations”.

“We increased our forecast for crude oil production in the Permian region by six percent in 2027 as new pipeline capacity and price incentives support growth,” the EIA pointed out in its March STEO.

The EIA highlighted in its latest STEO that it implemented a new modeling system for forecasting crude oil and natural gas production in the U.S. Lower 48 states this month.

“The new model modernizes our IT platform and enables more detailed, well-level decline curve analysis and calibration to recent historical production that will allow us to more flexibility in reacting to changes in oil markets,” the EIA said in the STEO.

“The new model also employs an improved methodology for benchmarking to survey data from EIA-914, Monthly Crude Oil and Lease Condensate, and Natural Gas Production Report, using well-level production information to better inform the forecast in states where well reporting data are still incomplete,” it added.

Production Breakdown

In its March STEO, the EIA projected that Lower 48 States, excluding the Gulf of America, will produce 11.17 million barrels per day in 2026. This year, the EIA expects the Federal Gulf of America to produce 1.97 million barrels per day and Alaska to produce 0.47 million barrels per day, the STEO showed.

In 2027, the EIA sees Lower 48 States, excluding the Gulf of America, producing 11.50 million barrels per day. The EIA expects the Federal Gulf of America to produce 1.83 million barrels per day next year and Alaska to produce 0.50 million barrels per day in 2027, the STEO highlighted.

The EIA’s February STEO saw Lower 48 States, excluding the Gulf of America, producing 11.15 million barrels per day, the Gulf of America producing 1.98 million barrels per day, and Alaska producing 0.47 million barrels per day, in 2026.

That STEO projected that Lower 48 States, excluding the Gulf of America, would produce 10.96 million barrels per day in 2027. It saw the Gulf of America producing 1.87 million barrels per day next year and Alaska producing 0.50 million barrels per day in 2027.

Historical Production Data

A data page on the EIA website displaying monthly U.S. field production of crude oil – which was last updated on February 27 and includes data from January 1920 to December 2025 – showed that monthly U.S. field production of crude oil averaged 13.864 million barrels per day in October last year.

This figure is the highest in the data set, with the second highest figure coming in September 2025, at 13.828 million barrels per day, and the third highest figure coming in August 2025, at 13.810 million barrels per day.

Monthly U.S. field production of crude oil has averaged 13.8 million barrels per day or more only on those three occasions, according to the data page. Monthly U.S. field output has averaged 13 million barrels per day or more on 27 occasions, the data page showed. Twelve of these were seen in 2025, 11 came in 2024, and four came in 2023, the data page highlighted.

A data page on the EIA site showing annual U.S. field production of crude oil – which was last updated on March 6 and includes data from 1859 to 2025 – showed that annual U.S. field production of crude oil averaged 13.586 million barrels per day in 2025. Prior to this, annual U.S. field production of crude oil had only averaged 13 million barrels per day or more in one other year – 2024, at 13.235 million barrels per day – the data revealed.

To contact the author, email andreas.exarheas@rigzone.com