Recent and forecast increases in domestic crude production have sparked discussion on how rising crude oil volumes will be absorbed into the market.
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The U.S. Energy Information Administration (EIA) recently released a paper providing a short-term forecast of domestic crude oil production by type, supplementing the overall production forecast provided in the Short-Term Energy Outlook (STEO). Forecasts of production by crude type matter for several reasons. First, U.S. crude streams vary widely in quality. Second, the economics surrounding various options for the domestic use of additional domestic oil production are directly dependent on crude quality characteristics. Third, actual or potential export values also vary significantly with quality characteristics.