US oil production will not return to its peak output of nearly 13mn b/d following this spring's Covid-19-related collapse in demand, according to Occidental Petroleum chief executive Vicki Hollub.
US production's high-water mark came in November 2019 at 12.8mn b/d as US oil exports surged amid a growing global economy. Weekly production hit 13mn b/d as recently as March.
But prices fell sharply in the spring, first as Opec+ countries fought over production share, and then production plummeted as the Covid-19-pandemic spread, leading counties to shutdown schools and businesses and restrict travel. US production stood at about 11mn b/d last week.
"It will be just too difficult to replace the 2mn b/d that we've lost and grow beyond that," Hollub said today at the Energy Intelligence Forum. The next three to four years will see a restoration of some of that production as demand continues to recover, Hollub said.
Global demand fell from about 100mn b/d before the pandemic to about 80mn b/d, but is climbing back to around 94mn b/d, she said. When global demand returns to the 100mn b/d level is not clear, she said, but global supply and demand should be back in balance by the end of 2021.
