U.S. crude oil output is going to fall more than expected previously in 2021 and bounce back in 2022, according to a monthly government report released on Wednesday.
Crude output will drop 260,000 barrels per day to 11.02 million bpd this year, and then rebound to 11.73 million bpd in 2022, U.S. Energy Information Administration said. In its previous forecast, the statistical arm of the Department of Energy had forecast a 200,000-bpd drop in 2021.
The agency cut its output forecast for the third and fourth quarters of 2021 to arrive at the lower number for the year.
U.S. crude output fell as demand dropped during the COVID-19 pandemic, and has not yet returned to pre-pandemic record production of 12.966 million bpd, seen in November, 2019.
As crude output falls this year, consumption of petroleum and other liquid fuels is expected to rise less than previously expected, according to the report.
The agency expects demand of 1.48 million bpd, down from 1.55 million bpd forecast last month. The agency also reduced its forecast for consumption growth next year, reducing it to 760,000 bpd, from 890,000 expected a month ago.
U.S. consumers will spend more to heat their homes this winter (October through March) than last year due to higher energy commodity prices, the EIA projected in its Winter Fuels Outlook, issued earlier on Wednesday.