WASHINGTON (Reuters) - U.S. Energy Secretary Dan Brouillette on Friday described a dire situation in global energy markets, saying that the coronavirus pandemic and massive oil surplus have created a lethal combination.
“This is a time for all nations to seriously examine what each can do to correct the supply/demand imbalance,” Brouillette said in prepared remarks for Friday’s G20 meeting of energy ministers from the world’s top 20 economies. “We call on all nations to use every means at their disposal to help reduce the surplus.”
Saying that his own country’s oil industry has been “gravely impacted” by the “incredibly destructive decline in the oil markets,” Brouillette said that the United States expects to see a reduction in production of nearly 2 million barrels per day by the end of this year. He added that some models show a drop of up to 3 million barrels per day.
The U.S. Energy Information Administration said on Tuesday that U.S. crude production is expected to slump by 470,000 barrels per day (bpd) and demand is set to plunge by about 1.3 million bpd in 2020 as the global coronavirus pandemic slams markets.
President Donald Trump and other administration officials have been in conversations with other nations to help reduce the surplus and the United States has been storing as much oil as possible in its Strategic Petroleum Reserve to pull it out of an oversupplied market.
“And we will look for more opportunities to ease the hurt felt by our producers,” Brouillette said. “But it is in our collective interest that the industry returns to a position of strength to ensure that energy again leads economic growth and enhances our national security.”
Reporting by Lisa Lambert, Editing by Rosalba O'Brien and Steve Orlofsky