On Wednesday, the US Energy Information Administration (EIA) cut its forecast on the country’s crude oil output for 2020.
The latest forecast showed that the country is likely to produce 11.38 million bpd, down by 879,000 bpd from the 2019 level. The previous estimates were steeper, a 990,000 bpd fall.
The domestic petroleum demand is seen to drop by 2.12 million bpd to 18.42 million bpd, a downgrade from last month’s prediction of a 2 million bpd fall.
Gasoline demand is expected to sink by 1.04 million bpd to 8.27 million bpd. The previous forecast only expected a 91,000 bpd slump. Distillate fuel demand is likely to shrink by 340,000 bpd to 3.76 million bpd, compared to a 360,000 bpd fall forecast previously.
The output is estimated to tumble by 300,000 bpd to 11.08 million bpd next year, while the previous prediction only expected a 120,000 bpd decline.
So far this year, US production has fallen to around 10.5 million bpd, from 12 million bpd as the economy was weakened by the coronavirus pandemic. US prices were supported by the fall, recovering to almost USD45/barrel in recent weeks.
However, lately, oil futures have nosedived near three-month lows due to the fears of oversupply. Moreover, Saudi Arabia’s state-owned Saudi Aramco slashed the October official selling prices (OSP) for its Arab light oil, signaling a softening demand.
