EIA's Short-Term Energy Outlook -- January 9, 2018

Oil markets:

• EIA estimates that OPEC countries cut crude oil production output in 2017, but those cuts were offset by increased production in non-OPEC countries, especially the United States and Canada
• EIA forecasts U.S. crude oil production to grow by 980,000 barrels per day in 2018, and we expect most of that growth to come from tight rock formations in Texas and North Dakota
• 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. We expect to see growth near 2.0 million barrels per day in 2018 and 1.3 million barrels per day in 2019
• EIA expects Brent crude oil prices to remain near $60 per barrel over the next two years
• EIA estimates that U.S. crude oil production averaged 9.9 million barrels per day in December, which would be the fourth-highest level of monthly production on record, behind only the final three months of 1970
• EIA raised its estimate for December production from its previous estimate as reported survey data on October production came in significantly higher than expected. The incoming data contributed to a reassessment of our previous views on well productivity, particularly in the Eagle Ford, Bakken, and Permian regions.

Gasoline/refined products:

• EIA forecasts U.S. motor gasoline consumption in 2018 to total about 9.3 million barrels per day, which would top the record for highest annual consumption set in 2016 [making America great again]
• EIA is expecting a strong increase in the use of ethane in 2018 and 2019 as several new petrochemical facilities on the U.S. Gulf Coast that use ethane as a feedstock open

Natural gas:

• EIA forecasts LNG exports to increase to 3 billion cubic feet per day in 2018. The sharp increase from 2017’s level of 1.9 billion cubic feet per day is the result of infrastructure projects in several states, including Maryland, Georgia, and Texas, coming online in 2018
• the forecast for natural gas exports to Mexico anticipates that growth will continue in the wake their reforms to the energy market and our increased capacity from new export infrastructure in the United States

Electricity:

• the electric power sector reduced its use of natural gas in 2017. EIA attributes that shift to competitive coal prices and higher-than-average hydroelectric generation, which was part of increased competition from renewables as a whole 

Coal [Hillary will see a lot of miners laid off in Appalachia]:

• EIA is forecasting reduced U.S. coal production in 2018, retreating by 2% following a 6% increase in 2017. We expect to see the biggest production decreases in the Appalachia region, which is currently forecast to dip by 25 million short tons

Renewables:

• EIA is forecasting 2019 to be the first year wind overtakes hydropower as the leading source of renewable electricity generation, due to a combination of hydro’s cyclical nature and the continued growth in wind capacity