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Thu Apr 9, 2020, 08:16 AM

So Much For "Energy Dominance" - US Likely To Become A Net Importer Again Before 2020 Ends

he United States is likely to become a net importer of crude oil and petroleum products later this year, undercutting President Donald Trump's touting of the U.S. as achieving "energy dominance" under his administration.

The new forecast from the Energy Department's independent statistical arm comes as oil prices hover in mid-$20s per barrel, about one-third the price at the beginning of the year. The economic slump from the coronavirus pandemic that has choked off fuel demand and a flood of oil from Saudi Arabia and Russia have driven prices down, which Trump said last week has "ravaged" the U.S. energy sector.

U.S. oil production is expected to decline by 500,000 barrels per day this year from 2019 levels to 11.76 million barrels per day, DOE's Energy Information Administration said in its monthly market update. That estimate is a reversal from its forecast a month ago, when it still expected U.S. production to reach 13 million barrels per day, a new record level that would have kept the U.S. as the leading global producer.

EIA said the U.S. would become a net crude oil importer in the third quarter of the year "because as U.S. crude oil production declines, there will be fewer barrels available for export." But the EIA's forecast may still be too rosy, since many industry analysts are expecting U.S. production to decline by 3 million barrels per day or more this year as companies tighten spending and idle drilling rigs. Earlier on Tuesday, Exxon Mobil became the latest company to announce cutbacks, saying it would cut its expenditures this year by $10 billion, or about 30 percent of its total, mostly from operations in the Permian Basin of West Texas and New Mexico.



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