US oil production will stabilize around 11 million b/d while the sector weathers weak demand from the coronavirus pandemic and works off massive inventories, but growth is still possible during an eventual economic recovery, US Secretary of Energy Dan Brouillette said Oct. 28.
"I do think you'll see production continue to increase," Brouillette told a press conference at the 4th India Energy Forum by CERAWeek hosted virtually by IHS Markit. "We don't see peak oil anytime in the next one or two or even five years."
Brouillette conceded that US producers "are facing some pain," but added that "economies are beginning to open up and demand is coming back up."
US oil drillers pumped 11.22 million b/d in September, the highest since April, according to the latest estimate from the US Energy Information Administration, which is a part of Brouillette's Department of Energy. US output sank to a 2020 low of 10.02 million b/d in May after the spring's oil price crash and demand plunge.
EIA predicts US oil production will average 11.45 million b/d in 2020 and fall to 11.09 million b/d in 2021, down from 12.25 million b/d in 2019.
The record for highest monthly production was set in November 2019 at 12.86 million b/d, according to EIA.
'Economic twilight zone'
S&P Global Platts Analytics expects US oil production to decline about 860,000 b/d year on year in 2020 to average 11.38 million b/d. It sees 2021 output falling another 1.14 million b/d to 10.24 million b/d as a result of the massive capital spending cuts drillers made during the oil price crash.
Dan Yergin, chairman of IHS Markit, said during the same event that he expects an "economic twilight zone" until a vaccine conquers the coronavirus. He said oil production would plateau until the economy recovers.
"At that point, we'll start to see a consolidation and restructuring of the industry, and we'll start to see production go up again," he said.
Yergin said annual production growth will not match the records set in recent years, "but it will recover."
"Will it get to 13 million [again]? No one knows at this point," he added. "I think we should expect that once recovery is here, we'll see continual, modest growth, not at the pace we've seen in the past."
US oil production saw its sharpest year-on-year increase in 2018, growing 1.59 million b/d from 2017 to 10.96 million b/d, according to EIA data.
