Domestic Oil Output On Track To Break 1970s Record Levels

Oil prices were trading lower Wednesday morning following a Department of Energy report that paints an encouraging outlook for U.S. oil production.

The United States Oil Fund LP (ETF) USO lost more than 1 percent after the Department of Energy said it expects U.S. oil production in 2018 will rise to 10 million barrels a day, CNBC reported. This would imply a level of oil production above the 1970's record average of 9.6 million barrels per day.

As it stands, oil output surged around 9 percent over the past eight months to 9.3 million barrels, which represents its estimated production level for all of 2017.

"Increased drilling activity in U.S. tight oil basins, especially those located in Texas, is the main contributor to oil production growth, as the total number of active rigs drilling for oil in the United States has more than doubled over the past 12 months," CNBC quoted EIA acting Administrator Howard Gruenspecht as saying in a statement.

American drillers will be looking to take full advantage of higher year-over-year oil prices and the OPEC agreement, which calls for members and non-members to lower their collective oil output, perhaps to the benefit of American firms.

The government agency is also calling for the price of WTI to average $53.61 a barrel in 2018, which marks a decrease of nearly 3 percent versus last month's short-term outlook.

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