On Tuesday, the US Energy Information Administration (EIA) adjusted down its crude output forecast for 2020.
This year, the EIA expected the US crude production to go down by 860,000 bpd to 11.39 million bpd. Previously, it estimated the fall of 800,000 bpd.
Further, in the second quarter of 2021, the crude output is seen to fall even deeper to an average of 11 million bpd as new drilling activity will not generate enough production to offset declines from existing wells. For the overall year, the output is estimated to drop by 290,000 bpd to 11.1 million bpd.
Drilling activity is predicted to climb next year to an average of 11.3 million bpd in the last quarter.
Meanwhile, the statistical arm of the Department of Energy also adjusted down US consumption. It now expects the country’s consumption of petroleum and other liquid fuel to decline by 2.38 million bpd to 18.16 million bpd this year. Previously, it predicted a slip of 2.31 million bpd.
Globally, the EIA saw that the consumption of petroleum and liquid fuels will average 92.9 million bpd for all this year, down by 8.6 million bpd year-on-year but next year it would rise by 5.9 million bpd.
Looking forward, in 2021, EIA estimated inventory draws would occur and cause some upward pressures on oil prices. Brent crude prices will average at USD47/barrel.
