Gibson Tanker Market Report

A year ago, US crude production reached its highest level ever, averaging 12.9 million b/d in November 2019. At the time, many were convinced the sector was set for robust growth in the years to come. However, the global pandemic, a brief but fierce oil price war and an unprecedented negative WTI prices back in April changed all that. In May, US output plummeted to just 10 million b/d, nearly 3 million b/d below its peak. A partial rebound to 11.25 million b/d was seen by November on the back of firmer oil prices. Yet, the US Energy Information Administration (EIA) still expects domestic output to edge down by around 300,000 b/d by July 2021, as production from new wells is unlikely to be sufficient to offset legacy well declines. The turning point is expected to happen around mid-2021, with output climbing modestly above November levels by the end of next year, if WTI prices remain consistently above $45/bbl.

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