U.S. oil production will fall through 2017, the government said Tuesday in its latest montly energy outlook.
U.S. crude oil production averaged about 9.4 million barrels per day last year, but that will be high compared to what's projected for 2016 and 2017, the Energy Information Administration reported in its short-term energy outlook for April.
The Energy Department's independent analysis arm forecasts that oil production in 2016 will average 8.6 million barrels a day, before sinking to 8.0 million in 2017. Both averages are 100,000 barrels below March's forecast.
The agency said crude oil production in March 2016 averaged 9.0 million barrels a day, or 90,000 barrels below February production.
The annual outlook comes as The Wall Street Journal reported Tuesday that market analysts had agreed oil prices had reached their lowest level in a year, expecting prices could rebound.
The global oil supply glut has caused a number of companies to ratchet back production, laying off thousands of workers and taking drilling rigs off line because low oil prices make high production rates uneconomical.
The government agency's outlook says prices for North Sea Brent, a key price benchmark for crude oil originating from Europe, averaged $38 per barrel in March, $6 per barrel more than the previous month. The price benchmark for the U.S., West Texas Intermediate, was about the same.
The outlook forecasts both price benchmarks averaging $35 per barel in 2016, and $41 per barrel in 2017, which could be good news. Not so fast. The agency goes on to say that "the current values of futures and options contracts suggest high uncertainty in the price outlook."
The Energy Infrormation Administration says its forecast for the average West Texas price in July 2016 of $35 should be considered with July crude oil contracts sold on the Nymex exchange. That suggests the market expects prices to range from $27-$57 per barrel.