Crude oil production in the U.S.' most prolific shale play, the Permian region, is expected to increase by 26.5% in 2019 and another 18.6% in 2020, according to the country's Energy Information Administration (EIA).
The EIA said Thursday in a statement that crude production in the oil-rich Permian is expected to rise by 915,000 barrels per day (bpd) this year and another 809,000 bpd next year.
Located between western Texas and eastern New Mexico states, the Permian region had an average crude oil production of 3.4 million bpd in 2018, according to the EIA data.
However, this is set to rise and crude production in the Permian is estimated to average around 4.3 million bpd this year, and rise to an average of approximately 5.1 million bpd next year.
"Increases in Permian crude oil production in Texas and New Mexico are supported by crude oil pipeline infrastructure expansions that came online earlier this year," the statement said.
An extension to the Sunrise Pipeline in central Texas added an estimated 120,000 bpd of takeaway capacity to the Permian region in early 2019, which increased pipeline capacity to Cushing, Oklahoma -- a major trading hub for crude oil and price settlement point for West Texas intermediate (WTI).
In addition, the Seminole-Red pipeline that runs from western Texas to the Houston area reaching the U.S.' Gulf Coast added some 200,000 bpd of capacity.
"These expansions, which helped alleviate transportation bottlenecks and led to increased prices for WTI in Midland, Texas, relative to prices for WTI-Cushing," the EIA said in the statement.
"The higher relative prices in the Permian region should continue to encourage crude oil production growth in the region," it added.
Total crude oil production in the U.S. is expected to average 12.3 million bpd in 2019 and 13.3 million bpd in 2020, according to the EIA's the Short-Term Energy Outlook for November.
By Ovunc Kutlu