US oil production fell sharply in 2020, but the Energy Information Administration expects it to recover and even set new records in just two years, it said in its annual energy outlook (AEO2021).
According to the EIA, US oil production in 2023 will exceed the previous annual average of 12.25 million barrels per day, reached in 2019.
In 2020, US oil production reached an average of 13.1 million bpd on average 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, falling short to less than 10 million barrels a day.
However, US energy consumption will take years to return to 2019 levels – exactly eight years. The EIA notes, however, that “this projection largely depends on the pace of US economic recovery.”
Electricity demand, according to AEO2021, is expected to return to 2019 levels by 2025 – again, a slower recovery than US oil production, which also has export markets on which to base.
Related: China’s oil storage levels fall in early 2021
The fact that US production could return to 2019 levels is remarkable, given that domestic consumption will take several years to recover.
Currently, US oil production, according to the EIA, is on average 10.9 million barrels per day – 2.2 million barrels per day lower than the highs reached in March 2020.
The number of active drilling rigs is on an upward trajectory, but in general the number of active drilling rigs is still 400 less than it was just a year ago.
Meanwhile, OPEC production is also declining by millions of barrels per day from 2019 levels as part of its coordinated production cuts.
By Julianne Geiger for Oilprice.com
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