U.S. oil production fell dramatically 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 forecast (AEO2021).
According to the EIA, U.S. oil production will exceed in 2023 the previous annual average of 12.25 million barrels per day, achieved in 2019.
In 2020, U.S. oil production rose by 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, dropping briefly below 10 million barrels per day.
U.S. energy consumption, however, will take years to return to 2019 levels – eight years to be exact. The EIA notes, however, that “this projection is highly dependent on the pace of the US economic recovery.”
Electricity demand, according to AEO2021, is expected to return to 2019 levels in 2025 – again, a slower recovery than U.S. oil production, which also has export markets to support.
Related: Oil storage levels in China are falling in early 2021
It is notable that production in the United States may return to 2019 levels, considering that domestic consumption will take years to recover.
Currently, U.S. oil production, according to the EIA, averages 10.9 million barrels per day – 2.2 million bpd below the highs reached in March 2020.
The number of active drilling rigs is on an upward trend, but overall, the number of active drilling rigs is still 400 below where it was just a year ago today.
Meanwhile, OPEC production has also dropped 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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