U.S. Oil, Gas Production Forecasts Mixed

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Pegging the price of Brent crude oil at $87 per barrel by 2050, the U.S. government said crude oil production could decline while natural gas expands "significantly."

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U.S. Oil Production Set for Declines

Oil priced at $87 per barrel by 2050 leads to a slight decline in crude oil production in the United States as prime drilling acreage diminishes, though domestic natural gas is primed for expansion, the federal government said.

The price for Brent crude, the global benchmark for the price of oil, was trading near $98 per barrel early Thursday amid questions about the durability of a cease-fire agreement in the Middle East. Brent had moved close to $120 per barrel during the height of the conflict.

A recent survey from the Federal Reserve Bank of Dallas found shale drillers need oil priced at around $50 per barrel to profitably drill new wells and cover existing operating expenses. Shale drillers have yet to respond to the war premium given questions about the longevity of a higher-for-longer outlook.

In an annual energy outlook for 2026, the U.S. Energy Information Administration (EIA) used Brent priced at $87 per barrel for its forecast modelling to 2050. That, however, is not supportive of production gains.

"Production is between 12.4 million barrels per day (BBL/d) and 12.7 million BBL/d by 2050 in most cases, compared with 13.6 million BBL/d produced in 2025, with the Permian Basin remaining the key area for U.S. onshore oil output," the analysis read.

According to Industrial Info Resources data, more than a hundred projects in the Permian with a total investment value of $11.3 billion, with Ovintiv among the largest spenders with a $305 million program.

Subscribers to the Industrial Info Resources Global Market Intelligence (GMI) Oil & Gas Project Database can learn more by viewing the related project reports.

The EIA estimates Permian production will account for about 60% of total inland crude oil production, averaging 6.6 million BBL/d in 2026. Total inland U.S. crude oil production is on pace to average 11.17 million BBL/d this year.

Natural Gas Primed for Growth

As basins mature, however, the pressure changes and production trends move toward natural gas as heavier molecules associated with crude oil remain trapped in sub-surface pores. EIA in its annual report said natural gas production is expected to expand "significantly" by 2050.

In its short-term market report for March, EIA analysts forecast domestic inland natural gas production would average 117.4 billion cubic feet per day (Bcf/d) this year. By 2050, production could be as high as 151 Bcf/d.

"Production growth is strongest in the East region, which includes the low-cost Appalachian Basin," EIA analysts wrote in a report published Wednesday.

With production on pace to average 36.9 Bcf/d, Appalachia accounts for about 30% of total inland natural gas production. That's expected to expand by 1.5% by next year. In the maturing Permian, meanwhile, natural gas production is forecast to increase by more than 5% by 2027 to average 29.7 Bcf/d.

For the Appalachia Basin, the EIA said the expansion in output will need to be coupled with more pipelines to get that gas to the U.S. Gulf Coast for exports as liquefied natural gas.

By the Numbers

• 12.7 million BBL/d of oil by 2050
• 13.6 million BBL/d produced in 2025

Key Takeaways

• U.S. gas production to expand "significantly"
• Higher oil prices not enough for shale producers

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 trillion (USD).