Oil and gas production in the United States in April fell by 670,000 barrels per day (b/d) and 2.6 billion cubic feet per day (Bcf/d), respectively, the U.S. Energy Information Administration’s (EIA) said in its July Crude Oil and Natural Gas Production Report.
April was the first full month to be affected by the low crude oil and natural gas prices related to the sudden drop in petroleum demand associated with coronavirus mitigation efforts. The declining market led oil and natural gas operators to shut-in wells and limit the number of wells brought online, lowering the output for the major oil- and natural gas-producing regions.
Texas hardest hit
The largest fall in crude oil production took place in Texas, where output plunged 234,000 b/d, or -4.3%, between March and April 2020. More crude oil is produced in Texas than in any other state or region of the United States, accounting for 41% of the national total in 2019.
The ‘Lone Star State’ also saw the largest monthly decrease for natural gas production in April, decreasing by 1.2 Bcf/d, or 4 percent. Oklahoma had the second-largest decrease at 0.5 Bcf/d, or 6 percent, while Louisiana and Pennsylvania recorded production increases for April.
Crude oil production in the U.S. has been in steep decline largely due to Covid-19-related lockdowns which sharply brought the gasoline consumption in transportation sector.
The EIA expects crude oil prices will average $40 per barrel (b) for the first half of 2020 and will average $39/b in the second half of 2020.
In its July Short-Term Energy Outlook (STEO), analysts forecasts that U.S. crude oil production will average 11.6 million barrels per day (b/d) in 2020. These levels would be 0.6 million b/d lower than the 2019 average of 12.2 million b/d.