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US oil output to hit 13 million b/d in 2020 despite slower growth

 


 

By Meghan Gordon, Brian Scheid / Platts

WASHINGTON
Petroleumworld 01 15 2019

US oil production is on track to hit 12 million b/d in March and 13 million b/d in October 2020, but the growth rate will slow considerably from recent levels in response to lower forecast WTI prices and ongoing Permian pipeline constraints, the Energy Information Administration said Tuesday.

EIA expects the spread between WTI-Cushing and Midland wellhead prices to widen this year, which will slow drilling activity growth in Texas and New Mexico, but that growth will start to accelerate on a monthly basis into 2020 after new pipeline capacity comes online later this year.

US oil production is forecast to average 12.07 million b/d in 2019 and 12.86 million b/d in 2020, EIA said in its monthly Short-Term Energy Outlook, which included 2020 projections for the first time.

Related story: OPEC oil output averaged 31.92 million b/d in 2018, expected to average 30.88 million b/d in 2019: EIA

EIA said the US produced 11.8 million b/d in December, a staggering 1.76 million b/d increase from December 2017. US output averaged 10.93 million b/d in 2018.

The US will become a net oil exporter in Q4 2020, EIA said, with total exports of crude and refined products exceeding total imports by 870,000 b/d.

"We expect the United States to remain the world's largest producer," EIA Administrator Linda Capuano said in a statement.

Other highlights of the Short-Term Energy Outlook:

PRICES

** EIA forecast Brent crude prices to average $60.52/b in 2019 and $64.76/b in 2020, down from the 2018 average of $71.19/b.

** WTI crude is forecast to average $54.19/b this year and $60.76/b in 2020, down from $65.06/b in 2018.

** Average US regular motor gasoline prices will fall 26 cents/gal from 2018 to $2.47/gal in 2019, then rise to $2.62/gal in 2020 on higher crude. Regular gasoline prices averaged $2.73/gal in 2018.

SUPPLY

** Global oil markets will be relatively balanced in 2019-20 as US output growth more than offsets declines from the OPEC-led output cuts, EIA said.

** Permian production will account for 600,000 b/d of total US growth in 2019 and 500,000 b/d in 2020, EIA said. It sees Permian output hitting 4.8 million b/d by end-2020, about 1 million b/d higher than in December 2018.

** EIA expects Bakken output to rise to 1.4 million b/d in 2019 and 1.5 million b/d in 2020, as growing natural gas takeaway constraints slow growth. The Bakken produced about 1.3 million b/d in 2018.

** Eagle Ford output is forecast to rise by 90,000 b/d to 1.4 million b/d in 2019 and then fall slightly in 2020.

** US offshore oil production is expected to average 1.9 million b/d in 2019 and 2.2 million b/d in 2020, up from 1.7 million b/d in 2018, when 11 new projects came online. This year, EIA expects six new projects to start, followed by another 12 in 2020.

** Alaska's production is expected to remain flat at 490,000 b/d in 2019 and 2020.

** Globally, EIA sees non-OPEC producers increasing oil supply by 2.4 million b/d from 2018 levels to 65.54 million b/d in 2019, then by another 1.9 million b/d to 67.44 million b/d in 2020. The US, Canada, Brazil and Russia will drive 2020 oil output growth.

** Average OPEC output is expected to fall to 30.88 million b/d in 2019 and 30.90 million b/d in 2020, down from 31.92 million b/d in 2018.

** Total OPEC oil production averaged 31.38 million b/d in December, down 840,000 b/d from November, EIA said. The latest S&P Global Platts OPEC survey, released last week, found OPEC members produced 32.43 million b/d in December, down about 630,000 b/d from November.

** Saudi Arabia produced 10.4 million b/d in December, down 520,000 b/d from November, when its production hit an all-time high.

** Iranian output averaged 2.8 million b/d in December, down 100,000 b/d from November when US sanctions were re-imposed.

** EIA said Venezuela produced 1.25 million b/d in December, down from 1.28 million b/d in November. It expects Venezuelan output to fall below 1 million b/d in the second half of 2019 and to 700,000 b/d in 2020, according to Erik Kreil, an international energy analysis team leader.

DEMAND

** EIA sees US oil consumption rising to an average 20.77 million b/d in 2019 and 21.01 million b/d in 2020, up from 20.45 million b/d in 2018.

** Global liquid fuel consumption is expected to rise to 101.54 million b/d in 2019 and 103.07 million b/d in 2020, up from 100 million b/d in 2018.


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Story edited by Valarie Jackson from Platts

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