(Bloomberg) – The U.S. sees domestic crude output growth slowing more than expected this year as choppy oil prices limit drilling activity.
U.S. crude output is now expected to grow by 160,000 bpd this year to 13.37 million bpd and remain flat in 2026, according to the Energy Information Administration’s Short-Term Energy Outlook released Tuesday. The production forecast for this year represents a drop of about 50,000 bpd from the agency’s previous projections in June.
Drilling rigs in the U.S. have been declining steadily and are hovering near four-year lows even as oil prices stabilized after plunging to multi-year lows on worries about global demand.
The agency also revised previous monthly data to show that producers have been drawing down inventories of pre-drilled wells in June. The number of drilled but uncompleted wells fell by seven to 5,291, the lowest among records dating back to the start of 2013.
The so-called DUC count can be an indication of future supplies, with the plunge in the count signaling that producers would be unlikely to unleash a wave of output quickly even if oil prices surge.
Still, some producers benefited from a brief surge in prices as a standoff between the U.S. and Iran injected a super-sized premium into the market, though it quickly evaporated after it became clear that Tehran had no plans to target energy infrastructure. The short-lived bump triggered a flood of hedging among shale drillers seeking to lock in higher prices. This may allow for some incremental drilling if prices resume their slide.
EIA expects significant global oil inventory builds will put consistent downward pressure on oil prices in the longer term, with Brent prices averaging $58 a barrel in 2026. The global benchmark is currently trading near $70 a barrel.
