Veren Inc T.VRN

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• The U.S. Energy Information Administration (EIA) expects that Brent prices will average $49/b in 2021, up from an expected average of $43/b in the fourth quarter of 2020. The forecast for higher crude oil prices next year reflects EIA's expectation that while inventories will remain high, they will decline with rising global oil demand and restrained OPEC+ oil production. EIA forecasts Brent prices will average $47/b in the first quarter of 2021 and rise to an average of $50/b by the fourth quarter. The first quarter 2021 average is $5/b more than forecast in last month's STEO, and the fourth quarter average is $1/b more. The higher expected first quarter prices reflect steeper expected global oil inventory draws as a result of the December 3 OPEC+ decision to limit its previously planned production increases in January 2021. EIA expects high global oil inventory levels and surplus crude oil production capacity will limit upward pressure on oil prices through much of 2021.
• EIA estimates that U.S. crude oil production was 11.2 million b/d in November, which is up from 10.9 million b/d in September (the most recent month for which historical data are available). The increase mostly reflects greater production in the U.S. Federal Gulf of Mexico after hurricane-related disruptions. EIA expects that U.S. crude oil production will decline to less than 11.0 million b/d in March 2021 mostly because of falling production in the Lower 48 states, where EIA expects declining production rates at existing wells will outpace production from newly drilled wells in the coming months. EIA expects crude oil production in the Lower 48 states will increase from 8.7 million b/d in February 2021 to 9.1 million b/d in December 2021, as drilling increases in response to rising oil prices. This increase contributes to total U.S. crude oil production reaching 11.4 million b/d in December 2021. On an annual average basis, EIA expects U.S. crude oil production to fall from 12.2 million b/d in 2019 to 11.3 million b/d in 2020 and 11.1 million b/d in 2021