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Energy

U.S. crude output to fall less in 2020 than previously forecast: EIA

FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. REUTERS/Angus Mordant

NEW YORK (Reuters) - U.S. crude oil production is expected to fall by 800,000 barrels per day (bpd) this year to 11.45 million bpd, the U.S. Energy Information Administration (EIA) said on Tuesday, a smaller decline than its previous monthly forecast for a drop of 870,000 bpd.

The agency estimated that production rose to 11.2 million bpd in September and said it expects output to generally decline to an average of 11 million bpd in the second quarter of 2021 because new drilling activity will not generate enough production to offset declines from existing wells.

U.S. energy firms last week added oil and natural gas rigs for a third week in a row for the first time since October 2018 after price increases in recent months prompted some producers to start drilling again.

However, signs of a renewed wave of COVID-19 infections around the world have dented the outlook for demand.

The EIA forecasts that global consumption of petroleum and liquid fuels will average 92.8 million bpd for all of 2020, down by 8.6 million bpd from 2019, before increasing by 6.3 million bpd in 2021.

The agency now expects U.S. petroleum and other liquid fuel consumption to decline 2.31 million bpd to 18.23 million bpd in 2020, a slightly bigger decline than its previous forecast for a drop of 2.12 million bpd.

For 2021, U.S. demand is expected to rise 1.74 million bpd to 19.97 million bpd compared with a previous forecast for a rise of 1.64 million bpd.

U.S. crude output is expected to fall 360,000 bpd to 11.09 million bpd in 2021, compared with a previous estimate of a decline of 300,000 bpd.

Reporting by Devika Krishna Kumar in New York; Editing by Marguerita Choy

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