The US Energy Information Administration (EIA), in its May Short-Term Energy Outlook (STEO), expects US crude oil production to decline in 2020 and 2021. EIA attributed the production decline to efforts to contain the coronavirus pandemic which put petroleum products demand and crude oil prices under heavy pressure.
US crude oil production reached an average of 12.2 million b/d in 2019. However, EIA forecasts that the output will decline to 11.7 million bpd this year and fall further to 10.9 million bpd next year. Spot US WTI prices averaged $58/barrel in January 2020, but then fell to just $17/barrel in April.
The collapsing prices have forced producers to cut their spending which impacted the drilling activity in the US. In February, there were 753 active drilling rigs in the Lower 48 states, excluding the Federal Offshore Gulf of Mexico (GOM). However, the number dropped to 738 and 572 in March and April, respectively.
