US crude output drop in 2020 to be steeper than last forecast: EIA

NEW YORK: US crude oil production is expected to fall by 990,000 barrels per day (bpd) this year to 11.26 million bpd, the US Energy Information Administration (EIA) said on Tuesday, a steeper decline than its forecast last month for a decline of 600,000 bpd.

The agency also expects US petroleum and other liquid fuel consumption to drop 2 million bpd to 18.46 million bpd in 2020, a slightly smaller decline than its previous forecast for a drop of 2.12 million bpd.

Oil prices collapsed this year as the coronavirus pandemic slammed global demand and restricted travel across the world.

However, consumption worldwide, including Asia, has started to recover as some countries ease lockdowns and stay-at-home orders.

Global demand for petroleum and liquid fuels averaged about 93.4 million bpd in July, the EIA said. Demand was down 9.1 million bpd from a year earlier but it was up from an average of 85 million bpd during the second quarter, the agency said.

The crash in prices also prompted US oil producers to slash new drilling activity and curtail production from existing wells.

The EIA said US production curtailments were more extensive than estimated for its previous month's report, leading to the revision this month.

For 2021, US crude output is expected to slump 120,000 bpd to 11.14 bpd, a much smaller decline than the 620,000 bpd the agency previously forecast.

US oil demand in 2021 is expected to rise by 1.57 million bpd to 20.03 million bpd, compared to a previous estimate for an increase of 1.6 million bpd.