The Department of Energy forecast Tuesday that oil output in the United States could top both Saudi Arabia and Russia by the end of 2019.
The forecast said U.S. production would average 10.8 million barrels per day in 2019 and would be more than 11 million barrels per day by November of next year. If the prediction is accurate, the U.S. would become the top oil producer in the world and beat both Saudi Arabia and Russia for the first time since 1975.
The Energy Information Administration (EIA) of the U.S. Department of Energy said U.S. production would average 10.3 million barrels per day this year, the highest output levels ever for the country. Russia produced an average of nearly 11 million barrels per day in 2017, while Saudi Arabia produced about 10 million barrels. Both countries, though, have agreed to slow production in order to push prices up.
"The major risk factors would be more global in nature, rather than anything specific domestically," EIA acting administrator John Conti said on a conference call. "Domestically, things are lining up in terms of moderate prices and increased opportunity for production."
Much of the production growth will be concentrated in the Permian Basin, the largest U.S. oilfield stretching across Texas and New Mexico, said John Staub, the EIA director of the office of petroleum, natural gas and biofuels analysis. As a result, pipeline capacity constraints should not be a major limiting factor in starting new production, he said.
"Led by U.S. production, particularly in the Permian Basin, and new oil sands projects in Canada, non-OPEC production is forecast to continue growing through the end of 2019," EIA acting Administrator John Conti said in a statement. "We expect to see growth near 2.0 million barrels per day in 2018 and 1.3 million barrels per day in 2019."
In its report, the EIA predicted oil prices in the U.S. will average $54.01 a barrel in the first quarter of 2018, an increase from earlier predictions of $51.79. By the fourth quarter, the average price per barrel is predicted to hit $57.31, up from the EIA's last forecast of $54.95.
U.S. oil prices rallied amid the news Tuesday, rising $1.44 to $63.17 a barrel to U.S. crude's highest price since 2014.