US crude oil production set to surge to 26 year high by 2014

US CRUDE oil production is expected to rise to 7.9m barrels a day in 2014, marking the highest annual level of production since the late 1980s, according to a forecast from a US government agency.

The US Energy Information Administration’s latest Short-Term Energy Outlook expects US domestic crude oil production to increase to 7.3m barrels a day this year, before rising to 7.9m barrels in 2014 – the highest level of output since 1988.

The jump – from the current 6.4m barrels a day pumped domestically last year, an increase of 0.8m barrels of oil a day over the year – marks a hike of 23 per cent.

The rapid increase demonstrated how fracking technology has transformed the US energy market over the past five years. The EIA cites drilling projects in the Williston, Western Gulf and Permian Basins that are expected to account for the bulk of forecast growth over the next two years.

If the EIA’s projections – which are the first to include a forecast for 2014 – prove accurate, US crude oil production will have risen by 40 per cent between 2011 and 2014, and almost 50 per cent since the start of the decade.

Meanwhile, net imports of crude oil are expected to fall to 6m barrels a day by 2014 – just 32 per cent of the US’s energy needs – thanks to “continued substantial increases in domestic crude oil production”, the EIA said. The government energy agency added that the Brent crude spot price is expected to fall to $88 a barrel in 2014.