USA EIA Releases Latest Oil Price Forecast
The U.S. Energy Information Administration (EIA) has kept its Brent spot average price forecasts for 2021 and 2022 flat in its latest short term energy outlook (STEO).
The EIA’s November STEO sees Brent spot prices averaging $71.59 per barrel this year and $71.91 per barrel next year. In its previous October STEO, the EIA projected that Brent spot prices would average $71.38 per barrel in 2021 and $71.91 per barrel in 2022.
The EIA’s November STEO highlighted that Brent crude oil spot prices averaged $84 per barrel in October. This was up $9 per barrel from September and $43 per barrel from October 2020, the report outlined.
“Crude oil prices have risen over the past year as result of steady draws on global oil inventories, which averaged 1.9 million barrels per day during the first three quarters of 2021,” the EIA said in its latest STEO.
“In addition to sustained inventory draws, prices increased after OPEC+ announced in early October, and reaffirmed on November 4, that the group would keep current production targets unchanged,” the EIA added.
“We expect Brent prices will remain near current levels for the rest of 2021, averaging $82 per barrel in the fourth quarter of 2021. In 2022, we expect that growth in production from OPEC+, U.S. tight oil, and other non-OPEC countries will outpace slowing growth in global oil consumption and contribute to Brent prices declining from current levels to an annual average of $72 per barrel,” the EIA continued.
The organization’s November STEO estimates that 98.9 million barrels per day of petroleum and liquid fuels was consumed globally in October, which the EIA noted was an increase of 4.5 million barrels per day from October 2020 but 1.9 million barrels per day less than in October 2019. The EIA forecasts in its latest STEO that global consumption of petroleum and liquid fuels will average 97.5 million barrels per day for all of 2021, which it said is a 5.1 million barrel per day increase from 2020. Global consumption of petroleum and liquid fuels is expected to increase by 3.3 million barrels per day in 2022.
U.S. crude oil production averaged an estimated 11.4 million barrels per day in October, up from 10.7 million barrels per day in September as a result of production increases following disruptions from Hurricane Ida, the EIA noted. In the November STEO, production is forecasted to rise to 11.6 million barrels per day in December and average 11.1 million barrels per day for all of 2021, before increasing to 11.9 million barrels per day in 2022. Growth will come largely as a result of onshore operators increasing rig counts, the EIA outlined.
The EIA highlighted that its November STEO remains subject to heightened levels of uncertainty related to the ongoing recovery from the Covid-19 pandemic. As of November 9, 4.38pm CET, there have been 250.15 million confirmed cases of Covid-19 and 5.05 million deaths, according to the latest information from the World Health Organization (WHO). As of November 8, a total of 7.08 billion vaccine doses have been administered, the latest WHO data shows.
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