US oil output to bottom out at 10.6 million b/d in March 2021: EIA

Washington — US oil production will continue to decline until bottoming out at 10.63 million b/d March 2021, or 2.2 million b/d below the record high set in November 2019, the US Energy Information Administration said June 9.

EIA now predicts US oil output to average 11.56 million b/d in 2020, a downward revision of 130,000 b/d from last month's forecast, with 2021 output averaging 10.84 million b/d, down 60,000 b/d from last month, according to the Short-Term Energy Outlook for June.

This year will mark the first decline in US oil production since 2016.

Global oil demand is on track to shrink 8.3 million b/d year on year to average 92.53 million b/d in 2020, a slight reduction from last month. EIA sees 2021 global oil demand averaging 99.71 million b/d, recovering more than 7 million b/d from 2020, but still 1.2 million b/d below 2019 levels.

EIA raised its outlook for crude prices from last month to reflect a combination of announced OPEC+ oil supply cuts, declining US crude production, and rising oil demand related to governments easing stay-at-home orders.

The report predicts WTI crude prices will average $35.14/b in 2020, up about $5 from last month's outlook, and $43.88/b in 2021, up 57 cents.

EIA sees Brent crude prices averaging $38.02/b in 2020, up $3.89 from last month, and $47.88/b in 2021, up 7 cents.