REUTERS: US oil production decline in 2020 to be steeper than previously expected

U.S. crude output is set to fall by 670,000 bbl/d in 2020 to 11.56 million bbl/d, the U.S. Energy Information Administration (EIA) said on Tuesday, steeper than the 540,000 bbl/d decline it forecast previously as drillers have slashed activity.

The agency now expects U.S. petroleum and other liquid fuel consumption to plunge 2.4 million bbl/d to 18.06 million bbl/d in 2020 compared with its previous forecast for a drop of 2.19 million bbl/d.

Oil prices collapsed this year as the coronavirus pandemic slammed global demand and restricted travel across the world.

The EIA said 2020 world oil consumption is expected to plummet by 8.30 million bbl/d to 92.53 million bbl/d, a sharper slide than the 8.15 million bbl/d previously forecast.

However, demand across the world has started to edge higher with countries easing lockdowns and stay-at-home orders.

"Initial data show the global oil market rebalancing faster than EIA previously forecast," EIA Administrator Linda Capuano said in a statement.

"We expect [global oil] inventories to begin drawing in June, as a result of sharper declines in global oil production during June and greater global oil demand than previously expected."

OPEC, Russia and other producers agreed in April to cut supply by 9.7 million bbl/d. The group agreed on June 6 to sustain those cuts, equal to about 10% of global supply, through July.