U.S. oil production's long road back from COVID-19

Fresh U.S. government projections of U.S. oil production underscore how it will be a long time before the country again reaches its record pre-pandemic output — if ever.

Why it matters: The Energy Information Administration's outlook published Tuesday provide the first glimpse at where they see U.S. output in 2022 — at a substantial, but nowhere near complete, recovery.

Where it stands: U.S. production reached around 13 million barrels per day at the dawn of 2020 but then fell precipitously as COVID-19 caused demand and prices to crater.

The intrigue: It's not clear whether production will ever return to those levels, partly due to the unknowns around future global demand and prices.

• Also, investors appear to be out of patience with years of investment in high growth at the expense of returns.
• "Most shale producers are now more focused on clearing debt and honoring investor pledges to keep fiscal discipline," Bloomberg notes.

Of note: The 2021–2022 analysis is hardly set in stone.

• EIA updates its projections every month, but they nonetheless provide a running gauge of where modelers see the market heading.
• And these are tragically unpredictable times. The analysis "remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve," EIA notes.

Go deeper: US EIA revises crude price forecast higher amid tightened fundamental outlooks (S&P Global Platts)