The Energy Information Administration reported that March crude oil production averaged 12.716 million barrels per day (mmbd), down 28,000 b/d from February. Reductions occurred in the Gulf of Mexico (41,000 b/d) North Dakota (19,000 b/d), and Colorado (13,000 b/d). Because of the oil price war and demand destruction, the collapse in oil prices likely undercut output in March, but the substantial drop in production started in April.
Texas production rose by 67,000 b/d to an all-time high of 5.422 mmbd.
The gains from last April were still 824,000 b/d. And this number only includes crude oil. Other supplies (liquids) that are part of the petroleum supply fell 490,000 b/d from a year ago.
The EIA-914 Petroleum Supply Monthly (PSM) figure was 229,000 b/d lower than the weekly data reported by EIA in the Weekly Petroleum Supply Report (WPSR), averaged over the month, of 12.945 mmbd.
The March figure was about 150,000 b/d higher than the 12.870 mmbd estimate for that month in the May Short-Term Outlook. This difference is enough to justify a “rebenchmarking” to EIA’s model in future production levels at this time.
The EIA is projecting that 2020 production will exit the year at 11.030 mmbd. And for 2021, it projects an exit at 11.170 mmbd. These are downward revisions of almost 3 million barrels per day as a result of the price collapse and slow rebound in prices through the forecast horizon.
The EIA significantly revised its forecast for future U.S. crude oil production. The downward revision is subject to great uncertainty because the collapse in oil prices has seemingly hit bottom and prices are on the rebound, with an expectation that oil demand destruction will end as the economy reopens. The current forecasts have supply coming into balance with demand in June or July. However, the ballooning of oil stocks implies a long period of inventory drawdown before prices would return to their range prior to the pandemic.
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INO.com Contributor - Energies
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