By Anthony Harrup

U.S. crude-oil production is likely to decline over the next 18 months as producers cut back on drilling activity in response to lower oil prices, the U.S. Energy Information Administration said Tuesday.

In its monthly Short Term Energy Outlook, the EIA said it expects U.S. crude- oil output will slip to 13.3 million barrels a day in the fourth quarter of 2026 from a record 13.5 million barrels a day in the second quarter of this year.

The agency said the number of rigs reported by oil services company Baker Hughes fell more than it had expected last month.

"With fewer active drilling rigs, we forecast U.S. operators will drill and complete fewer wells through 2026," the EIA said.

The EIA expects production to average a little above 13.4 million barrels a day this year, and just under 13.4 million barrels a day in 2026.

Baker Hughes said there were 442 rigs drilling for oil in the U.S. last week, down by 50 from a year before and the fewest since October 2021. The drop in oil prices has led producers to cut back on capital expenditures, including drilling.

The EIA predicts lower oil prices with the rise in global inventories. It sees international benchmark Brent crude falling to $61 a barrel by the end of this year from $64 a barrel in May, and averaging $59 a barrel in 2026. The agency projects West Texas Intermediate crude to fall to $57 a barrel in the fourth quarter, and average $56 a barrel next year.

Slowing oil demand growth, and output increases by members of the OPEC+ group and non-OPEC sources, "contribute to our expectation that global oil production will exceed consumption over the forecast period, causing global oil inventories to build and putting downward pressure on oil prices," the EIA said.

The agency projects global oil demand growth of 800,000 barrels a day this year and 1.1 million barrels a day in 2026.

Oil production is seen rising by 1.6 million barrels a day this year and by 800,000 barrels a day in 2026.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

June 10, 2025 13:29 ET (17:29 GMT)

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