Pessimistic forecasts for US oil production after the hurricane

  US crude oil production will drop by 200,000 barrels per day in 2021 (Getty)

The repercussions of Hurricane Ida that hit the United States continue to directly affect the US economyA regulatory body said that production of about 1.4 million barrels per day of oil in The Gulf Of Mexico, equivalent to 77% of the total, is still suspended today, Wednesday, after the hurricane.

The production of more than 1.72 billion cubic feet per day of natural gas production in the region is still on track, according to the Office of Safety and Environmental Enforcement.

Predicted Information Management American energy On Wednesday, US crude oil production decreased by 200,000 barrels per day in 2021 to 11.08 million barrels per day, noting that the hurricane will result in a larger decline than it had previously expected, down to 160,000 barrels per day.

More than 90% of offshore crude production in the Gulf of Mexico was halted in late August due to the severe storm. Several companies are still in the process of restoring production to normal levels, and power cuts and damage to some facilities have slowed the implementation of restart plans.

As a result of the shutdown, the administration said, Gulf of Mexico production averaged 1.5 million barrels per day in August, down 300,000 barrels per day from July.

It is expected that production in the Gulf of Mexico will gradually return during the current September, and will average 1.2 million barrels per day per month, before returning to an average of 1.7 million barrels per day in the fourth quarter.

The administration also said it expected to increase consumption of petroleum and other liquid fuels by 1.55 million barrels per day to 19.74 million barrels per day in 2021, compared to a previous forecast of an increase of 1.58 million barrels per day.

For 2022, US crude production is expected to increase to about 11.72 million barrels per day on average, driven by growth in shale oil production.

The total number of oil and gas rigs increased by about 94% over the same period last year, according to “Reuters”.

Demand is expected to rise in 2022 by 890,000 barrels per day to 20.63 million barrels per day, which is a significant increase from the administration’s previous forecast of an increase of 860,000.

Globally, the Energy Information Administration said that an estimated 98.4 million barrels per day of petroleum and liquid fuels were consumed in August, an increase of 5.7 million barrels per day from August 2020, but still 4 million barrels per day less than in August. 2019.

solar energy

On Wednesday, the administration of President Joe Biden published a report showing that the United States may get 40% of its electricity from solar energy by 2035, a significant increase from the current share of solar energy in electricity generation.

A study on the future of solar energy explains how this type of solar energy can help cleanse the US electricity grid from methods that use coal and fossil fuels, and thus contribute to achieving the Biden administration’s goal of eliminating harmful emissions from the electricity sector by 2035.

“The study highlights the fact that solar energy, the cheapest, cleanest and fastest growing source of energy, could produce enough electricity for every home in the United States by 2035 and employ up to 1.5 million people in the field,” Energy Secretary Jennifer Granholm said in a statement.

Demand is expected to return to normal

The French investment bank, Societe Generale, said today, Wednesday, that it expects oil demand to return to normal in 2022, but that the market may record a limited supply surplus.

The bank said in a note that oil demand is “still on the path to return to normal” and is expected to reach 99.3 million barrels per day in the first quarter of 2022, and to recover to the “pre-Covid” level of 100 million barrels per day, at 101.4 million. barrels per day by the third quarter.

He added that a likely nuclear deal between the United States and Iran by November, which could bring more Iranian oil to the market, may encourage the Organization of the Petroleum Exporting Countries (OPEC) and its allies, or “OPEC +”, to adjust production.

The bank expects the Brent price to average $70 per barrel in the fourth quarter of 2021 and $67.5 by the first quarter of 2022.

Oil rose more than 1%, while benchmark Brent crude was at $72.75 a barrel by 13:40 GMT, as energy companies in the Gulf of Mexico slowly resume production after Hurricane Ida.

It is expected that US demand for oil will recover to 20.3 million barrels per day by the end of 2021 and increase to 21.6 million barrels per day by August 2022, compared to 18.8 million barrels per day in January 2021.

The bank said that Europe’s oil consumption may reach 13.2 million barrels per day by the end of 2021, “close to normal levels”, while Chinese demand may grow “at a reasonable pace, rising from 14.7 million barrels per day at the beginning of 2021 to 15.3 million barrels per day by the end of 2021.” .

Indian demand, which received a “big hit” in May, may also return to normal, while demand will reach 5.1 million barrels per day by the end of 2021 and more, to 5.2 million barrels per day by the end of 2022.

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