The Energy Information Administration on Wednesday cut its U.S. crude production outlook for this year and next, signaling that the drop in prices is having an impact on the shale boom.
The agency reduced its forecast 1.5 percent to 9.22 million barrels a day this year, according to its monthly Short-Term Energy Outlook. It reduced its 2016 forecast to 8.82 million barrels a day from 8.96 million last month.
America’s oil drillers have sidelined more than half the country’s rigs since October as prices have tumbled. The number of active oil rigs in the U.S. fell by 13 to 662 last week, according to data compiled by Baker Hughes Inc.
West Texas Intermediate, the grade traded on the New York Mercantile Exchange, will average $49.23 a barrel this year versus the August projection of $49.62, according to the report. The EIA reduced its 2015 estimate for Brent crude, the benchmark for more than half the world’s oil, to $54.07 from $54.40.