U.S. oil production fell sharply in 2020, but the Energy Information Administration expects it to pick up and even set new records in just two years, he said in his long-awaited annual energy outlook (AEO2021).
According to the EIA, US oil production in 2023 will exceed its previous annual average of 12.25 million barrels per day, achieved in 2019.
In 2020, US oil production averaged 13.1 million bpd for the week ending March 13. But the overall annual average for the pandemic year was much lower after oil production fell sharply in August and fell just below 10 million barrels per day.
However, US energy consumption will take years to return to 2019 levels – eight years to be exact. However, the EIA notes that “the projection is highly dependent on the pace of US economic recovery.”
According to the AEO2021, the demand for electricity after 2025 is expected to return to 2019 levels – again a slower recovery than US oil production, which also has the export markets.
Related: China’s oil storage levels fall in early 2021
That U.S. production could return to the 2019 level is noteworthy, as domestic consumption will take years longer to recover.
At present, according to the EIA, US oil production averages 10.9 million barrels per day – 2.2 million bpd lower than the highs reached in March 2020.
The number of active drilling rigs is on an upward trajectory, but overall the number of active drilling rigs is still 400 lower than today, just one year ago.
Meanwhile, OPEC’s production is also declining by millions of barrels per day from 2019 levels as part of its coordinated production cut.
By Julianne Geiger for Oilprice.com
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