U.S. crude oil production is expected to fall by 230,000 bbl/d in 2021 to 11.08 million bbl/d, the U.S. Energy Information Administration (EIA) said on June 8, a smaller decline than its forecast last month for a drop of 290,000 bbl/d.
Oil prices have rebounded to the highest levels in about two years, helped by restraint on supply by OPEC and allies.
The rise has prompted some U.S. producers to increase drilling activity, with rig counts rising for a 10th month in a row in May.
“Because prices of West Texas Intermediate crude oil remain above $60 per barrel during 2021 in the current forecast, we expect that producers will drill and complete enough wells to raise 2022 production from 2021 levels,” the EIA said.
In 2022, production is expected to average 11.8 million bbl/d, up from a forecast average of 11.1 million bbl/d in 2021.
The agency said it expects U.S. petroleum and other liquid fuel consumption to rise 1.49 million bbl/d to 19.61 million bbl/d in 2021, compared with a previous forecast for a rise of 1.39 million bbl/d.
U.S. gasoline consumption is expected to average 8.7 million bbl/d in 2021 and 9 million bbl/d in 2022.
Overall in 2022, U.S. demand is forecast to rise by 1 million bbl/d to 20.61 million bbl/d, compared to the EIA’s previous forecast for a rise of 1.02 million earlier.
Globally, consumption of petroleum and liquid fuels is expected to average 97.7 million bbl/d in 2021, a 5.4 million bbl/d increase from 2020. For 2022, the agency forecasts that global consumption of petroleum and liquid fuels will increase by 3.6 million bbl/d to average 101.3 million bbl/d.
Energy scholar Robert Bryce offers an unabashed view of the shale revolution, climate change and the future of energy. Spoiler alert: don’t expect oil and gas to disappear anytime soon.
The rise of LNG and gas exports and proximity to the Gulf Coast keep the Haynesville Shale play attractive.
The March 20 lease sale in the U.S. Gulf of Mexico brought in $244.3 million in high bids.