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India Gazette
11-06-2025
- Business
- India Gazette
US faces steeper crude oil production decline than previously anticipated: S&P Global Commodity Insights
New Delhi [India], June 11 (ANI): The US is facing a deceleration of crude oil production growth in 2025 than previously anticipated, according to a new analysis by S&P Global Commodity Insights. The global commodities information services provider projects a sharper year-on-year overall production decline in 2026 in the US than previously anticipated. The latest S&P Global Commodity Insights Global Crude Oil Markets Short-term Outlook finds that the US, which has been the biggest source of global supply growth in recent years, will be 'disproportionately impacted' by a combination of sluggish global oil demand growth and supply surplus. Following the most recent decision by OPEC+ members to proceed with the accelerated unwinding of production cuts, along with supply growth elsewhere, year-on-year global crude oil (and condensate) production growth is expected to be 2.2 million barrels per day for the second half of 2025, compared to just 390,000 barrels per day of expected crude oil demand growth. S&P Global Commodity Insights said that annual global total oil (liquids) demand growth for 2025 is expected to be the weakest since 2001, excluding the economic downturn during the 2008-09 financial crisis and the COVID-19 pandemic in 2020, averaging 770,000 barrels per day. The S&P report has revised down the crude oil price outlook, with Dated Brent ranging from the mid-USD 60s per barrel to USD 50 per barrel or below for a time (low USD 60-upper USD 40s for WTI). Jim Burkhard, Vice President and Global Head of Crude Oil Research, S&P Global Commodity Insights, states, 'The oil price is currently defenseless. Seasonal demand in the northern hemisphere summer may obscure the impact for a bit, but eventually there will be too much crude oil in the market absent a change in production trends.' The report asserted that the US is expected to bear the brunt of the impacts from an oversupplied market compared to other sources of non-OPEC supply, such as Canada, Guyana, and Brazil. 'The United States has been the biggest source of supply growth in recent years and a factor in OPEC+ supply restraint. Signs of weak U.S. crude supply growth and decline could begin to alter oil market psychology. However, much will still depend on the future course of OPEC+ production and oil demand,' said Ian Stewart, Associate Director, S&P Global Commodity Insights. (ANI)
Time of India
11-06-2025
- Business
- Time of India
US oil production to fall by 640,000 bpd by end-2026 amid surplus, demand slowdown: S&P Global
New Delhi: The United States is likely to see its oil production fall by 640,000 barrels per day (bpd) by the end of 2026 from mid-2025 levels, according to S&P Global Commodity Insights , which cited a weaker demand environment and an oversupplied global market as key drivers. S&P Global's latest Global Crude Oil Markets Short-term Outlook projects US oil production to average 13.34 million bpd in 2025, a growth of 131,000 bpd over the previous year, but 122,000 bpd lower than its earlier forecast. Production is expected to decline to 12.96 million bpd in 2026, marking the first year-on-year drop since 2020 and a fall of 378,000 bpd from previous projections. 'By the end of 2026, US oil production could be down 640,000 bpd from what it was in mid-2025,' the report stated. The outlook also highlighted that year-on-year global crude oil and condensate production is expected to grow by 2.2 million bpd in the second half of 2025. In comparison, demand is projected to increase by only 390,000 bpd over the same period. Total global liquids demand growth for 2025 is expected to average 770,000 bpd—its lowest annual increase since 2001, excluding the financial crisis of 2008–09 and the COVID-19 pandemic in 2020. This widening gap between supply and demand has prompted S&P Global to revise its crude price forecast. Dated Brent is expected to trade between mid-$60s and $50 per barrel for a period, while West Texas Intermediate (WTI) may drop to the low $60s or upper $40s. 'The oil price is currently defenseless. Seasonal demand in the northern hemisphere summer may obscure the impact for a bit, but eventually there will be too much crude oil in the market absent a change in production trends,' said Jim Burkhard, Vice President and Global Head of Crude Oil Research at S&P Global Commodity Insights. S&P Global noted that US shale production, due to its higher sensitivity to price signals, is more vulnerable than other sources of non-OPEC supply such as Canada, Guyana, and Brazil. 'In a lower price environment, US operators are likely to protect shareholder returns by reducing upstream spending. The result is a deceleration in growth to end the year, with the greatest impacts to production coming in 2026,' Burkhard said. Ian Stewart, Associate Director at S&P Global Commodity Insights, said, 'The United States has been the biggest source of supply growth in recent years and a factor in OPEC+ supply restraint. Signs of weak US crude supply growth and decline could begin to alter oil market psychology. However, much will still depend on the future course of OPEC+ production and oil demand.' The report follows the recent decision by OPEC+ members to accelerate the unwinding of production cuts. This, combined with output growth from other regions, is expected to add further pressure on prices. S&P Global added that a significant decline in US production could contribute to a potential price recovery in the future, depending on demand growth and production policy adjustments by OPEC+ and other major producers.
India Gazette
14-05-2025
- Business
- India Gazette
US may reduce oil production because of sluggish demand and falling crude prices: S&P
New Delhi [India], May 14 (ANI): United States may reduce its oil production which could lead to an annual decline in output in 2026 due to the sluggish demand and falling crude prices, according to a new analysis by S&P Global Commodity Insights. The report further added that slowing global oil demand, extreme uncertainty about the future of US trade and a coming supply surplus are expected to hobble US oil production growth. The S&P Global Commodity Insights Global Crude Oil Markets Short-term Outlook adds that global oil (total liquids) demand growth to average 750,000 barrels per day (b/d) in 2025, a downward revision of 500,000 b/d from the prior outlook. 'Although the magnitude of a potential economic and oil demand downturn is as uncertain as the future course of U.S. tariffs, the impact will be negative. Initial warning signs of a potential downturn are only starting to come into view. The level of severity is now the big question,' as per Jim Burkhard, Vice President and Global Head of Crude Oil Research, S&P Global Commodity Insights. The new demand outlook represents a significant shift in momentum following strong oil demand growth in the first quarter of the year when demand grew by an estimated 1.75 million b/d year-over-year. In contrast, demand growth for the remaining quarters of year is now expected to average 420,000 b/d, the report added. The report adds that the total U.S production for 2025 is expected to average 13.46 million b/d (gain of 252,000 b/d year-over-year) before falling back to 13.33 million b/d for 2026--a 130,000 b/d decline. 'U.S. oil production growth has been a dominant feature in the oil market since 2022. A price-driven decline in U.S. production would be a pivot point for the oil market--and set conditions for a potential price recovery. But much will depend on the severity of an economic slowdown and the impact on demand growth beyond 2025,' Burkhard added. Ian Stewart, Associate Director, S&P Global Commodity Insights said that dizzying changes to U.S. tariffs--both real and proposed--are taking their toll on market sentiment. 'Our current outlook assumes that there will ultimately be some movement away from trade barriers to China as well as signs of progress in U.S. trade talks with Europe, Japan and other major trading partners. That means that the risk for additional downside is very real. Any periods of price strength are likely to be fragile,' Stewart added. (ANI)
