EIA increases US crude oil production forecast oil price or further pressure

Friday (November 22), because the market is still uncertain whether the trade outlook can be improved, the demand outlook for crude oil is still weak, and the international oil price has fallen from the high of nearly two months. What's more, some analysts believe that there is still room for further increase in US crude oil production in a short period of time. Based on the historical data update and crude oil price forecast published in the past, EIA revised its forecast of US crude oil production in its latest short term energy outlook (steo). In the latest short-term outlook released in November 2019, the EIA forecasts the U.S. crude oil production in 2019 at 30000 barrels per day. Meanwhile, compared with the forecast in October, the EIA will increase the crude oil production forecast in 2020 by 119000 barrels per day. According to the latest monthly crude oil production survey data of the U.S. energy information agency, the U.S. energy information agency will update the historical high production created by 48 states with slightly lower production in August It's 90000 barrels per day, and it's expected to record higher initial production by 2020 as more wells are drilled in the Permian area of Texas. Meanwhile, EIA slightly revised the crude oil price expectation from November 2019 to January 2020.

In the short-term outlook for November, EIA revised up the price forecast of US crude oil by US $2 to US $56 / barrel, and the crude oil price forecast in December and January by US $1 / barrel to US $55 and US $54 respectively. A small increase in crude oil prices also contributed to the EIA's forecast for the first half of 2020, as the EIA assumes a six-month lag between changes in crude oil prices and production response. EIA forecasts that US crude oil production will increase from 11 million barrels / day in 2018 to 12.3 million barrels / day in 2019. Production in the Permian region is the main driver of the EIA forecast for crude oil production growth, while the EIA forecast that production in the Permian will increase by 915000 B / D in 2019 and 809000 B / D in 2020. The increase in Permian crude oil production in Texas and New Mexico is due to the expansion of the crude pipeline infrastructure that went online earlier this year. These expansions help ease transportation bottlenecks and increase the price of Midland crude oil in Texas (the price producers may expect to receive in the Permian region) relative to Cushing crude oil. Higher relative prices in the Permian should continue to encourage the growth of crude oil production in the region. EIA predicts that the Bakun area of North Dakota will become the second largest crude oil production growth area in 2019.

The crude oil production of Bakin oilfield is expected to increase by 152000b / D and 96000b / D respectively in 2019 and 2010. The offshore oil production area in the Gulf of Mexico will increase by 138000 B / D in 2019 and 116000 B / D in 2020. However, despite EIA's prediction that the overall crude oil production in the United States will continue to grow, EIA expects that the growth rate will slow down due to the decline in the number of oil drilling platforms. According to Baker Hughes, the number of active rigs dropped 23% from 877 in early January 2019 to 674 in mid November. During this period, the number of rigs in the Permian region decreased by 15%, from 487 to 408. Due to EIA's expectation that the price of Cushing crude oil will remain below US $55 / bbl by August 2020, EIA expects that the number of drilling rigs will continue to decline as producers cut capital expenditure, which will lead to a significant slowdown in domestic crude oil production growth in the next 14 months. But while the number of rigs in the United States is declining, the increase in rig efficiency has partially offset the decline in the number of rigs. In addition, higher initial production can also offset the decline in the number of rigs.