US oil production is down sharply in 2020, but the Energy Information Administration expects it to pick up again and even set new records in just two years, it said in its highly anticipated annual energy outlook (AEO2021).
According to the EIA, by 2023, US oil production will exceed the previous annual average of 12.25 million barrels per day achieved in 2019.
In 2020, US oil production peaked at an average of 13.1 million barrels per day 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, dropping briefly below 10 million barrels per day. .
However, energy consumption in the US will take years to return to its 2019 levels – eight years to be precise. However, the EIA notes that “that projection is highly dependent on the pace of the US economic recovery”.
According to the AEO2021, electricity demand will return to 2019 levels by 2025 – another slower recovery than US oil production, which also has export markets to pick up.
Related: China’s oil storage levels are declining in early 2021
That US production could return to 2019 levels is remarkable, given that the recovery in domestic consumption will take years longer.
Currently, according to the EIA, U.S. oil production averages 10.9 million barrels per day – 2.2 million barrels per day lower than the peaks reached in March 2020.
The number of active drilling rigs is on the rise, but overall the number of active drilling rigs is still 400 lower than the number it was a year ago today.
Meanwhile, OPEC’s production has also fallen by millions of barrels per day from 2019 as part of the coordinated production cuts.
By Julianne Geiger for Oilprice.com
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