U.S. crude oil production is expected to fall 870,000 bbl/d to 11.38 million bbl/d this year, a less steep decline than the 990,000 bbl/d previously forecast, the U.S. government said Sept. 9.
Nations worldwide, including the U.S., have throttled back oil output in response to the coronavirus pandemic, and as fuel demand has dropped sharply. U.S. production dropped from 12 million bbl/d to roughly 10.5 million bbl/d. That helped U.S. prices, which briefly fell to minus-$40/bbl, recover to nearly $45 in recent weeks.
A swifter rebound in output could create another supply glut. Lately, oil futures have slipped to near three-month lows due to oversupply fears. Saudi Arabia's state oil company Aramco cut the October official selling prices for its Arab light oil, a sign of softening demand.
U.S. petroleum demand is expected to fall 2.12 million bbl/d this year to 18.42 million bbl/d, versus 2 million bbl/d forecast last month.
Gasoline demand is expected to fall 1.04 million bbl/d this year to an average of 8.27 million bbl/d, compared with a decline of 91,000 bbl/d previously expected.
Demand for distillate fuels, including diesel and jet fuel, is expected to fall 340,000 bbl/d to 3.76 million bbl/d this year, slightly less than the 360,000-bbl/d decline forecast previously.
Output is expected to drop 300,000 bbl/d to 11.08 million bbl/d in 2021, the report said. Previously, the agency expected a decline of just 120,000 bbl/d next year.
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