WTI oil prices are trading back over the $72 mark on Wednesday as US crude oil production in the United States is expected to fall to 5.38 million barrels, produced daily in 2011.

US Light crude oil futures for July rose 55 cents to $72.22 midday Singapore time on the NYMEX.

The US slashed its oil production forecast from federal leases in the Gulf of Mexico by 6.1 percent for 2010, citing a ban on deepwater offshore oil drilling.

Crude oil output will average about 26,000 barrels a day lower than previously forecast in the fourth quarter, based on preliminary estimates following the announcement of the six month ban on May 27th, the US Energy Department said in its Short Term Energy Outlook.

The US government also estimated that 2011 oil production would drop by 70,000 barrels a day because of the deepwater oil drilling ban. Gulf of Mexico oil output will be 1.55 million barrels a day in 2011, down from 1.76 million in the May 2010 forecast.

Overall US crude oil production for 2011 is expected to drop by an estimated 2 percent, which may have an upward effect on WTI oil prices.

Source: Live Oil Prices