(Adds details on U.S. stockpiles, comments)
By Jessica Resnick-Ault
NEW YORK Feb 7 U.S. crude output will rise
100,000 barrels per day to 8.98 million barrels in 2017, 0.3
percent less than previously forecast, due to slower offshore
growth in the U.S. Gulf of Mexico, according to a monthly U.S.
government report released on Tuesday.
U.S. shale producers have reacted quickly and increased
drilling to take advantage of the rise in crude prices since the
Organization of the Petroleum Exporting Countries (OPEC) began
cutting output in an agreement that took effect on Jan. 1.
U.S. output will be closely watched as a quick rise in
supply could prevent the OPEC cut from reducing worldwide oil
inventories and dampen the impact of the producer group's first
supply cut in eight years.
The Energy Information Administration changed assumptions of
well decline rates and the pace at which some projects in the
Gulf of Mexico will ramp up, said EIA analyst Timothy Hess.
The EIA raised its onshore output forecast and lowered its
offshore forecast, he said.
This monthly short-term energy outlook comes as other
agencies, such as the International Energy Agency, have been
expecting crude output from the United States to grow
substantially this year, rising from 12.52 million barrels a day
to 12.84 million barrels.
However, that model includes crude and other oil liquids,
such as condensate. Including these fuels, the U.S. government
model is more closely aligned with the IEA. With condensates in
the mix, the EIA sees U.S. supply at 12.73 million barrels a
day, up 360,000 barrels from 2016.
"Global oil supply and demand is now expected to be largely
in balance during 2017 as the gradual increase in world oil
inventories that has occurred over the last few years comes to
an end," said Howard Gruenspecht, acting administrator of the
EIA, the statistical arm of the U.S. Department of Energy.
The agency expects U.S. crude production growth will surge
in 2018, rising 550,000 barrels a day.
(Reporting by Jessica Resnick-Ault; Editing by Marguerita Choy
and Lisa Shumaker)