Global Oil Supply & Demand is tightening fast - May 12

[dan_s]

EIA lowers forecast for 2020 U.S. crude-oil output

The U.S. Energy Information Administration lowered its forecast for 2020 domestic oil production to an average 11.7 million barrels per day, according to the Short-Term Energy Outlook report released Tuesday. That would be down 500,000 barrels a day from 2019. The April report had forecast 2020 oil output at 11.8 million barrels per day. "This forecast is the first annual decline since 2016, and we expect a further decline in 2021 of 0.8 million barrels per day," Linda Capuano, EIA administrator, said in a statement.

MY TAKE: This is just the first of several more reductions in EIA's U.S. oil production forecast. U.S. oil production peaked in November, 2019, started to decline in December and has dropped over a million barrels per day since mid-March. Over the period April to December of this year, oil well completions will be down AT LEAST 80% year-over-year. At the current drilling & completion activity + economic shut-ins U.S. oil production will be under 10 million barrels per day sometime this summer.