U.S. Crude Oil Production to Reach Record High in 2020

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Published Jan 14, 2020 6:58 PM by The Maritime Executive

The U.S. Energy Information Administration (EIA) has released its January 2020 Short-Term Energy Outlook, with  Administrator Dr. Linda Capuano saying that both global oil supply and consumption are expected to grow in 2020, with supply from non-OPEC producers, particularly the U.S., Norway, Brazil, and Canada, more than offsetting declining production from OPEC.

The EIA forecasts that U.S. crude oil production will reach new records in 2020 and 2021. Driven primarily by higher production in the Permian region of Texas and New Mexico, the outlook forecasts an average of 13.3 million barrels per day of U.S. crude oil production in 2020 and 13.7 million barrels per day in 2021.

Brent crude oil prices are expected to stay between $60 and $70 per barrel. However, a number of risk factors, such as geopolitical-related supply disruptions and the pace of global economic growth, could push prices could out of this range. “We expect Brent prices to average $65 per barrel this year, slightly higher on average than in 2019,” says Capuano. “With global oil inventories forecast to build during the first half of 2020, some downward oil price pressures could emerge in the coming months, though geopolitical risks could limit downward price movements.

Global liquid fuels inventories were mostly unchanged in 2019, and the EIA expects they will grow by 0.3 million barrels per day (b/d) in 2020 and then decline by 0.2 million b/d in 2021.

U.S. net imports of crude oil and petroleum products fell from an average of 2.3 million b/d in 2018 to an average of 0.5 million b/d in 2019, and the EIA estimates the U.S. has exported more total crude oil and petroleum products than it has imported since September. The U.S. is forecast to be a net exporter of total crude oil and petroleum products by 0.8 million b/d in 2020 and by 1.4 million b/d in 2021.

Natural Gas

The EIA’s January outlook expects a three percent increase in U.S. dry natural gas production growth in 2020, building on record production from 2019. Production set a new record in 2019, averaging 92.0 billion cubic feet per day (Bcf/d). Most of the growth in 2020 will come from associated gas in the Permian region. The EIA expects natural gas production to decline in 2021, as relatively low natural gas prices contribute to a reduction in natural gas directed drilling.

The EIA forecasts that Henry Hub natural gas spot prices will average $2.33 per million British thermal units (MMBtu) in 2020, down from $2.57/MMBtu in 2019. EIA expects that natural gas prices will then increase in 2021, reaching an annual average of $2.54/MMBtu.


EIA forecasts a 14 percent decrease in coal production in 2020, because of anticipated declines in both exports and domestic consumption in the power sector. 

Carbon Dioxide

After decreasing by 2.1 percent in 2019, energy-related carbon dioxide emissions are expected to decrease by 2.0 percent in 2020 and by 1.5 percent in 2021. The decline in emissions reflect a forecast of slowing GDP growth and less weather-related demand, resulting in lower total U.S. energy consumption.

The Outlook is available here.