US Energy Department estimates 2.1% drop in oil production in May,1% drop in natural gas

Output of oil and natural gas in the United States is expected to decline by 2.1 percent and 1 percent respectively in May compared with production levels this month, according to Energy Information Administration (EIA) estimates released on Monday.

Anticipated oil output in April of 8.709 million barrels per day is forecast to fall to 8.526 million barrels in May, while gas production is forecast to fall from 84.027 million cubic feet/day to 83.158 million cubic feet/day, the EIA said in a press release.

The forecast comes amid ongoing turmoil in global energy markets due to delays in striking a new OPEC deal, as well as a precipitous drop in energy consumption amid travel restrictions imposed in an attempt to halt the novel coronavirus (COVID-19) pandemic.

OPEC+ countries, as well as the United States, Brazil, and Canada reached a new agreement on Sunday to reduce oil production by 9.7 million barrels a day within the OPEC+ group starting from 1 May, and possibly up to 15 million barrels of oil per day with G20 nations taken into account.

The cuts are to be extended through the end of June before being tapered to 7.7 million barrels per day from July to the end of 2020, when they will then be reduced to 5.8 million barrels per day from January 2021 through April 2022.

The group is expected to meet once again on 10 June to determine whether additional measures need to be taken.