The United States Energy Information Agency (EIA) has released more promising predictions in its monthly Short-Term Energy Outlook. According to the EIA, shale wells are operating at an ever increasing rate and are on track to match levels of production not seen in the U.S. since 1972.

oil_rigPhoto Daniel Foster

“U.S. crude oil production in May increased to the highest output for any month in 26 years and is on track next year to reach the highest annual production level since 1972,” said Adam Sieminski, administrator of the U.S. EIA, during a conference coinciding with the agency’s monthly report.

What You’ll See at the Pump and How Soon

Although a decrease in pricing at the pump is likely over the next several months, you shouldn’t get your hopes up too much. Due to continual conflict in the global market, prices are set to drop slowly yet steadily. The U.S. national average price per gallon has hovered around $3.60 for the past several months. As we discussed in a previous post, the reason for this lack of movement has to do with the gap in supply from Libya, which has been filled by U.S. shale oil.

pumping_gasPhoto via Flickr

As conflict is resolved and U.S. production continues to surge, we’ll likely see a slow, steady decline in prices at the pump. The EIA predicts a drop in the national average to $3.54 per gallon by September, $3.38 by 2015.

Long-Term Outlook

If growth in the American oil sector continues at this rate, past the short-term predictions set forth by the EIA, we can expect to see continual boom growth and even lower prices at the pump and in the global market.

EIA officials are still positing that growth will continue in the U.S. shale oil sector, agency behavior which has historically caused speculators to push sector growth even further.

And the outlook outside U.S. borders is looking positive as well. EIA officials speculate that the shale revolution that has started in the U.S. will spread to other countries in a big way before the end of the decade, meaning that global market prices could drop even further.