The rapid decline in crude oil prices has exerted global pressure on the energy industry and nations heavily dependent upon oil. Russia is a glaring example, with the precarious state of its currency largely tied to the precipitous drop in oil prices this year. In the midst of such volatility, the outlook for the U.S. energy industry continues to be a concern. In a December 12, 2014 report, the U.S. Energy Information Administration (EIA) stated that it still expects U.S. crude oil production to rise in 2015, although it expects the projected growth in the third and fourth quarters to be less than that stated in its November 2014 short-term forecast.
While recognizing the disparity in events, the EIA developed its 2015 projections with an eye towards the changes in oil production during the 2008-2009 recession. The EIA now expects 2015 production to increase by 0.7 million barrels per day (bbl/d), resulting in an average production of 9.3 million bbl/d. Given the costs associated with research and exploration, the EIA projects that spending on those activities will decrease. However, the agency sees projected oil prices to be sufficient to support continued production in the key growth regions of the nation. The EIA noted that its projections are “particularly sensitive” to actual prices and economics.