U.S. crude oil production is expected to fall by 600,000 bbl/d in 2020 to 11.63 million bbl/d, the U.S. Energy Information Administration (EIA) said July 7, a smaller decline than the 670,000 bbl/d it forecast previously.
The agency now expects U.S. petroleum and other liquid fuel consumption to drop 2.1 million bbl/d to 18.34 million bbl/d in 2020, a smaller decline than its previous forecast for a drop of 2.4 million bbl/d.
Oil prices collapsed this year as the coronavirus pandemic slammed global demand and restricted travel across the world. Demand worldwide has started to recover as some countries ease lockdowns and stay-at-home orders.
The EIA said it expects 2020 world oil consumption to drop by 8.15 million bbl/d to 92.89 million bbl/d, a smaller decline than the 8.34 million bbl/d previously forecast.
The largest declines in U.S. liquid fuels consumption have already occurred and consumption will generally rise through the second half of 2020 and in 2021, the agency said.
For 2021, U.S. crude oil production is expected to decline by 620,000 bbl/d to average about 11.01 million bbl/d after dipping under 11 million bbl/d during the second quarter.
U.S. oil demand in 2021 is expected to rise by 1.6 million bbl/d to 19.94 million bbl/d, compared to a previous estimate for an increase of 1.4 million bbl/d.
U.S. oil producers have been gradually increasing drilling activity as oil prices have rebounded but output growth has been muted as investors pressure companies to rein in spending and focus on returns.
U.S. energy firms last week added oil and natural gas rigs for a third week in a row for the first time since October 2018 after price increases in recent months prompted some producers to start drilling again.
The EIA said U.S. oil production curtailments were more extensive than estimated for its previous month's report, leading to the revision this month.