U.S. expects record domestic oil production

Gasoline and crude prices projected to be lower than in 2018

The United States expects domestic oil production to reach new heights this year and next, and that prices — for both crude and gasoline — will be lower than they were in 2018.

Government forecasters are sticking to their forecast that the United States — already the world’s biggest oil producer — will become a net exporter of crude and petroleum products in 2020.

The U.S. Energy Information Administration said Tuesday that it expects the United States to pump 12.4 million barrels of crude a day in 2019 and 13.2 million barrels a day in 2020. The January average was 12 million barrels a day, up 90,000 from December.

Most of the increase is expected to come from the Permian Basin in Texas and New Mexico, where production has been booming for several years as operators use hydraulic fracturing and other techniques to squeeze more oil and gas from shale formations.

“The U.S. energy industry continues to transform itself,” said Linda Capuano, administrator of the agency, which is part of the Energy Department.

The agency expects U.S. benchmark crude to average $54.79 a barrel this year and $58 next year, down from $65 in 2018. It expects internationally traded oil to average $61 a barrel this year and $62 next year, down from $71 in 2018.

The 2020 price forecast is $3 a barrel lower than the agency had previously predicted. Capuano said strong growth in oil production worldwide would push prices lower.

That should produce nationwide average gasoline prices of $2.47 a gallon this year and $2.56 next year, down from $2.73 in 2018, according to the agency’s short-term energy outlook.

Oil prices tumbled in the last three months of 2018 on forecasts that global economic growth will weaken and hurt demand at the same time that production is surging in the U.S.