USA EIA Raises Oil Price Forecast

The U.S. Energy Information Administration (EIA) slightly raised its Brent oil price forecast for both 2022 and 2023, the organization’s latest short term energy outlook (STEO) has revealed.

The EIA now sees the Brent crude oil spot price averaging $102.13 per barrel this year and $95.33 per barrel next year, according to its November STEO. In its October STEO, the EIA projected that the Brent spot average would come in at $102.09 per barrel in 2022 and $94.58 per barrel in 2023.

Despite the increase in the EIA’s Brent forecast values in November, the figures are still down on September’s projections. In its September STEO, the EIA expected the Brent spot average to hit $104.21 per barrel this year and $96.91 per barrel next year.

“Growth in OPEC and non-OPEC oil production, most notably production in the United States, keeps the Brent crude oil price in our forecast lower on an annual average basis in 2023 than in 2022,” the EIA noted in its latest STEO.

“However, we expect the Brent crude oil price will begin rising in 2H23,” the EIA added in the STEO.

In its November STEO, the EIA warned that weakening global economic conditions, which it said could limit oil demand growth, “create the potential for oil prices to end up lower than our forecast”. The organization also noted that higher than forecast oil prices could stem from supply disruptions resulting from the EU’s impending bans on the seaborne import of crude oil and petroleum products from Russia.

The EIA expects U.S. crude oil production to average 11.83 million barrels per day in 2022, before rising to 12.31 million barrels per day in 2023, according to its November STEO. In its October STEO, the EIA expected U.S. crude oil output to come in at 11.75 million barrels per day in 2022 and 12.36 million barrels per day in 2023. U.S. crude oil production was 11.25 million barrels per day in 2021, the EIA highlighted in its latest STEO.

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