BAKU, Azerbaijan, October 10. The U.S. Energy Information Administration (EIA) has revised its forecast for U.S. crude oil production in the Lower 48 states (L48) for 2025, lowering expectations by 1% to 11.3 mb/d, Trend reports.
This adjustment, detailed in the October outlook, is primarily driven by a downward revision of the West Texas Intermediate (WTI) crude oil price forecast, which is now projected to average $72 per barrel in the fourth quarter of 2024 - approximately $6 lower than previous estimates.
The EIA noted that there is typically a six-month lag between shifts in pricing and corresponding changes in producer activity. As a result, the recent decline in prices is expected to begin impacting U.S. crude oil production by mid-2025. By December 2025, the forecast indicates that L48 crude oil production will reach 11.4 mb/d, reflecting a 2% decrease from the September STEO projections.
Industry surveys have also echoed these concerns, revealing a slowdown in exploration and production activities. The Dallas Fed Energy Survey's Business Activity Index for the third quarter of 2024 indicates a contraction, marking the first decline in the activity index since the third quarter of 2020. This contraction suggests heightened apprehensions regarding demand in the oil and natural gas sector, as companies grapple with fluctuating prices and market uncertainties.
The EIA's revisions particularly impact the Permian region, known for its substantial oil production. While the forecast for crude oil output in the Permian has been adjusted downward, the EIA remains optimistic about the region's long-term growth potential. Ongoing improvements in oil well productivity and the recent launch of the Matterhorn Express pipeline are expected to facilitate increased production over time. The pipeline's operation alleviates previous constraints on takeaway capacity for associated natural gas, thereby supporting additional crude oil production in the area.