U.S. crude oil production will fall by an average of 990,000 barrels per day, according to the Energy Information Administration, for an average of 11.26 million bpd. That is a much larger loss than the agency expected during its previous forecast made in the Short Term Energy Outlook of July.
In July, the EIA had predicted that crude oil production in the United States would fall by an average of 620,000 barrels per day for the full year 2020.
It caveat? That the August STEO “remains subject to increased levels of uncertainty as mitigation and retrieval efforts related to the 2019 new coronavirus (COVID-19) continue to evolve,” the EIA warned.
The assumptions for this month’s STEO were based on macroeconomic forecasts from IHS Markit, which assumes that GDP will fall 5.2% in H1 2020, and will rise from Q3 2020 to 2021.
In addition to the declining outlook for U.S. oil production, the STEO sees high crude inventory levels and excessive production capacity as a drag on oil prices in the coming months.
The EIA’s estimate for global liquid fuel production averaged 91.8 million barrels per day in Q2 – 8.6 million bpd less than the same period in 2019, driven by production quotas for OPEC and reduced production in the United States due to low oil prices.
However, the EIA expects US production to average 11.14 barrels per day on average next year, a slight decline from what was forecast last month. That’s because US oil demand next year is expected to rebound by 1.57 million bpd to 20.03 million bpd.
By Julianne Geiger for Oilprice.com
More top reads from Oilprice.com:
Back to the home page
.
