U.S. crude oil production is expected to fall by 210,000 barrels per day (bpd) in 2021 to 11.10 million bpd, the U.S. Energy Information Administration (EIA) said on Wednesday, a smaller decline than its previous forecast for a drop of 230,000 bpd, reported Reuters.
Oil prices have rebounded to their highest levels in about three years, helped by output curbs by the Organization of the Petroleum Exporting Countries and allies.
The rise has prompted some U.S. producers to increase drilling activity, with total rig counts rising for an 11th consecutive month in June. However, that was the smallest monthly increase since September 2020.
In the coming months, global oil production, largely from OPEC+ members, is expected to increase by more than global oil consumption, the EIA said.
"We expect rising production will reduce the persistent global oil inventory draws that have occurred for much of the past year and keep prices similar to current levels, averaging $72 per barrel during the second half of 2021," the agency said.
In 2022, EIA said it expects growth in production from OPEC+ and U.S. tight oil production, along with other supply additions, will outpace growth in global oil consumption and contribute to declining oil prices.
U.S. output is expected to average 11.85 million bpd, up from a forecast average of 11.10 million bpd in 2021.
The agency said it expects U.S. petroleum and other liquid fuel consumption to rise 1.52 million bpd to 19.64 million bpd in 2021, compared with a previous forecast for a rise of 1.49 million bpd.
For 2022, U.S. demand is forecast to rise by 1.04 million bpd to 20.68 million bpd, compared to the previous forecast for a rise of 1 million bpd.
Globally, consumption of liquid fuels is expected to rise by an additional 3.7 million bpd in 2022 to 101.4 million bpd, which would surpass 2019 levels.
