As COVID-19 vaccines are rolled out worldwide, the demand outlook is also improving, boosting oil prices. (Source: Shutterstock.com)
U.S. crude oil production is expected to fall by 160,000 bbl/d in 2021 to 11.15 million bbl/d, the U.S. Energy Information Administration (EIA) said on March 9, a smaller decline than its previous monthly forecast for a 290,000-bbl/d drop.
The agency said it expects U.S. petroleum and other liquid fuel consumption to rise 1.41 million bbl/d to 19.53 million bbl/d in 2021, the same increase as its previous forecast.
Oil prices have rebounded from the lows touched in 2020. OPEC and its allies, a group known as OPEC+, agreed this month not to increase supply in April as they await a more substantial recovery in demand amid the coronavirus pandemic.
U.S. rig counts have also begun to climb as crude prices rebound, with oil rigs rising by one to 310 last week, their highest since May, according to the latest report by energy services firm Baker Hughes Co.
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Hart Energy Unconventional Activity Tracker (Week of March 8, 2021)
The EIA estimated that U.S. crude oil production averaged 10.4 million bbl/d in February, which is down 500,000 bbl/d from estimated January production. Most of the decline reflects the cold temperatures that affected much of the country, particularly Texas, the EIA said.
As COVID-19 vaccines are rolled out worldwide, the demand outlook is also improving, boosting oil prices.
The EIA forecast that global consumption of petroleum and liquid fuels will average 97.5 million bbl/d for all of 2021, which is up by 5.3 million bbl/d from 2020. The agency forecasts that consumption will increase by another 3.8 million bbl/d in 2022 to average 101.3 million bbl/d.
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