The Energy Information Administration trimmed its U.S. crude production outlook for this year and the next as battered shale drillers idle rigs to conserve cash.
The agency cut its 2016 forecast to 8.67 million barrels a day from 8.69 million forecast in February, according to its monthly Short-Term Energy Outlook. Next year’s forecast was reduced to 8.19 million from 8.46 million.
America’s oil drillers have sidelined more than two-thirds of the country’s rigs since October 2014 as prices have tumbled from that year’s peak. The number of active oil rigs in the U.S. fell to 392 last week, the least since Dec. 2009, according to data compiled by Baker Hughes Inc.
West Texas Intermediate, the grade traded on the New York Mercantile Exchange, will average $34.04 a barrel in 2016 versus the February projection of $37.59, according to the report. Prices will average $40.09 next year, down from the last forecast of $50.
Brent crude, the benchmark for more than half the world’s oil, is projected to average $34.28 this year, down from the prior estimate of $37.52.