Raymond James researchers predict that the overall domestic U.S. oil supply will increase –but only modestly – over the next five years.
The financial services company said land-based oil production in America has made a strong comeback over the past few years – due to horizontal drilling plays like the Bakken – and this is making up for the downturn in offshore production.
In 2010, Raymond James predicted that the offshore oil production in the Gulf of Mexico would grow between 150 and 200 million barrels of oil per day (mbpd). However, the explosion of BP's Deepwater Horizon rig and the subsequent moratorium on deep-water drilling adversely affected the sector.
The firm believes that this will likely lead to the reduction of around 170 mbpd for the Gulf in 2011 and 200 mbpd in 2012.
The firm reports that onshore production in places such as the Eagleford and Bakken plays increased by 4 percent, or more than 140 mbpd, in 2010.
Raymond James believes that the growth of U.S. oil production will accelerate in 2013 as a result of growth in the deepwater oil supply returns.
Over the next five to 10 years, Raymond James believes that the U.S. oil supply will grow by around 400,000 bpd each year due to the recovery of offshore drilling operations.