Natural-Gas May Hit Record for Third Year in Row

U.S. crude oil production in 2013 is expected to reach its highest levels in 22 years, while natural-gas output will hit an all-time high for the third year in a row, thanks to a drilling boom in North Dakota, Texas and other areas, the Energy Information Administration said in an updated forecast.

Crude production will average an estimated 7.32 million barrels a day in 2013, up 14% from 2012, the administration said in its monthly Short-Term Energy Outlook on January 8. The latest projection was up 3.8% from last month's estimate and would be the highest production since the U.S. pumped an average of 7.42 million barrels a day in 1991. Next year, crude output is expected to be the highest since 1988.

The administration "expects crude oil production to continue to grow rapidly over the next two years," the report said. "Central to this projected growth will be ongoing development activity in key onshore basins," such as so-called tight oil plays in the Bakken formation in North Dakota and Montana and Eagle Ford in Texas.

Surging production also prompted revisions in natural-gas, with U.S. output this year forecast at an average of 66.27 billion cubic feet a day, up about 0.9% from both a previous estimate and from 2012. Production in 2014 is expected to decline slightly, to 65.98 billion cubic feet a day.

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