American oil production forecast to fall from 9.25 million b/d in 2015 to 8.86 million b/d in 2016
Is the Saudi strategy working? A new report suggests non-OPEC – primarily US shale production – oil supply is set to decline in 2016 as global markets rebalance after more than a year of oversupply and low prices.

The US Energy Information Administration’s Short Term Energy Outlook estimates that crude oil production is forecast to decrease through mid-2016 before growth resumes late in 2016. Projected U.S. crude oil production averages 9.2 million b/d in 2015 and 8.9 million b/d in 2016. American crude oil production has already declined by 120,000 b/d in Sept. compared with Aug.
In 2016, world supply is forecast to rise to 95.98 million b/d, slightly less than forecast last month, according to the EIA. Demand will grow to 95.2 million barrels a day, up 0.3 per cent from September’s forecast, due largely to stronger demand from China.
“Non-OPEC growth dries up to almost nothing; the Saudi strategy is working,” Michael Wittner, an analyst at Societe Generale in New York, told Reuters.
“It is has never been about a couple of months or a couple of quarters, but a couple of years, and that is how it is playing out.”
The agency is forecasting a global implied stock build of about 1.76 million bpd this year, and 0.8 million bpd next year. This suggests the huge oversupply that has forced prices sharply lower will recede slightly in 2016, with more rebalancing the following year.
American oil production is forecast to fall from 9.25 million b/d in 2015 to 8.86 million b/d in 2016, compared with 8.82 million expected in the EIA’s previous report.
Global oil demand will grow by the most in six years in 2016.
After falling by 0.3 million b/d in 2014, OECD petroleum and other liquids consumption is expected to rise by 0.5 million b/d in 2015 and by 0.2 million b/d in 2016, reaching an average of 46.4 million b/d, the highest annual average level of OECD consumption since 2010, according to the EIA.
The increase in 2015 stems from both economic and weather factors, with the United States contributing most of the annual consumption growth. U.S. consumption is expected to grow by an average of 0.3 million b/d in 2015 and by 0.1 million b/d in 2016.
Several other OECD countries saw economic conditions improve as they emerged from recessions, particularly countries in Asia and, to a lesser extent, in Europe.
In addition, colder-than-normal weather early in 2015 across OECD Europe contributed to a projected 0.1 million b/d increase in consumption in 2015.
Oversupply of crude caused partly by surging U.S. shale production caused prices to fall by more than half over the past 15 months .