If you're in the camp that is wishfully thinking U.S. oil production will rebound anytime soon north of 13 million barrels per day, U.S. Energy Secretary Dan Brouillette is ready to dash those hopes.
Brouillette said on Wednesday that he's not so sure U.S. production will rebound to 13 million bpd quickly-the level reached in January 2020 before the pandemic sunk its teeth into demand.
The reason, according to Brouillette, is that consumer demand just isn't sufficient to push demand for crude oil.
"We simply don't have the demand for production yet. We are still working through inventories that have built up during this pandemic," Brouillette said at CERAWEEK's India Energy Forum.
As a result, U.S. crude oil production might hover around 11 million bpd next year.
U.S. oil production began slipping from its all-time high of 13.1 million bpd in April, according to the Energy Information Administration (EIA), falling first to 12.4 million bpd as of the week ending April 3, then to 11.9 million bpd in the first week of May. June saw further reductions to 11.1 in the first week, followed by 11.0 in week one of July.
By the beginning of August, U.S. oil production really started to respond to the abysmal market conditions, falling to 10.7 million bpd. September and October production varied widely between 9.9 million bpd and 11.1 million bpd.
According to the EIA's monthly Drilling Productivity Report, November's production is supposed to be under October's, dispelling any notion that the U.S. oil industry is poised to make a comeback yet this year.
Back in August, Brouillette cited the EIA as saying that it would be 18 months before U.S. demand for liquid fuels returns to previous levels.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
Comments
US oil production isn’t going to see a comeback soon or perhaps ever. Production (overwhelmingly shale oil) has lost 6.37 mbd so far this year as a result of the COVID-19 pandemic. Yet, the US Energy Information Administration (EIA) is only admitting to a loss of only 3.2 mbd and grudgingly releasing the information in drips and drops.
According to my calculations based on the huge drop of the number of oil rigs since January, the US is currently producing no more than 6.63 mbd made of of 2.19 mbd of shale oil and 4.44 mbd of conventional oil. As a result, US crude oil imports are projected to rise in coming years from 9 mbd in 2019 to 12-13 mbd.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London