Seasonal factors offshore and weak economics onshore are expected to lead to a decline in U.S. crude oil production, a federal report said.

The U.S. Energy Information Administration said in a short-term market report total crude oil production will decline 4.3 percent from expected full-year 2015 levels to 8.8 million barrels per day by 2016. EIA forecasts were revised down by 100,000 bpd from August.

"Expected crude oil production declines from May 2015 through mid-2016 are largely attributable to unattractive economic returns in some areas of both emerging and mature onshore oil production regions, as well as seasonal factors such as anticipated hurricane-related production disruptions in the Gulf of Mexico," EIA said in its report.

EIA revised how it compiles data last month, leading it to recalculate early 2015 production figures. Monthly production figures for January through March were revised downward by 23 percent.

"The largest revisions include decreases of crude oil production in Texas," EIA's report read.

A report from the Dallas Federal Reserve last week said regional economic metrics indicated mostly positive momentum, "except in the energy sector."

Most energy companies operating in U.S. shale basins are reducing spending on exploration and production because of lower crude oil prices. Reduced spending has been reflected in fewer rigs deployed in shale oil and conventional basins. EIA said the number of rigs used in oil deposits is near a five-year low.

Oil services company Baker Hughes reports 662 rigs deployed in U.S. oil basins for the week ending Sept. 4, down from the 1,584 reported one year ago. Onshore rigs are down 55 percent and Gulf of Mexico rigs are down 50 percent year-on-year.

There have been no major disruptions to production so far this year from hurricanes in the Gulf of Mexico.

Just five companies came forward with bids on the 33 tracts in the Gulf of Mexico on the auction block last month in New Orleans. Though the lease sale drew in more than $20 million in high bids, the industry interest was suppressed as companies mind their revenue streams during the market downturn.