USA EIA Releases New Oil Price Forecast

USA EIA Releases New Oil Price Forecast
The United States Energy Information Administration reveals its latest average Brent spot price forecasts.

The United States Energy Information Administration (EIA) has again kept its average Brent spot price forecasts flat month on month, its September Short Term Energy Outlook (STEO) has revealed.

The EIA’s latest STEO shows that the organization expects Brent spot average prices to come in at $68.61 in 2021 and $66.04 in 2022. In its August STEO, the EIA forecasted that these prices would hit $68.71 this year and $66.04 next year. The EIA’s July STEO expected Brent spot prices to average $68.78 per barrel in 2021 and $66.64 per barrel in 2022.

Brent crude oil spot prices averaged $71 per barrel in August, which was down $4 per barrel from July but up $26 per barrel from August 2020, the EIA highlighted in its September STEO. The EIA noted in the STEO that Brent prices have risen over the past year as result of steady draws on global oil inventories, which it said averaged 1.8 million barrels per day during the first half of 2021.

“We expect Brent prices will remain near current levels for the remainder of 2021, averaging $71 per barrel during the fourth quarter of 2021,” the EIA said in its latest STEO. “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 to an annual average of $66 per barrel,” the organization added.

The EIA estimates that 98.4 million barrels per day of petroleum and liquid fuels was consumed globally in August, which it said was an increase of 5.7 million barrels per day from August 2020 but still four million barrels per day less than in August 2019. The organization forecasts that global consumption of petroleum and liquid fuels will average 97.4 million barrels per day for all of 2021, which it highlighted is a five million barrel per day increase from 2020, and 101.0 million barrels per day in 2022, which it noted is almost even with 2019 levels.

Total U.S. crude oil production averaged 11.3 million barrels per day in June, which the EIA said was the most recent monthly historical data point. The organization forecasts production will remain near that level through the end of 2021 before increasing to an average of 11.7 million barrels per day in 2022, “driven by growth in onshore tight oil production”.

The EIA stated that its September STEO remains subject to heightened levels of uncertainty related to the ongoing recovery from the Covid-19 pandemic. Globally, as of September 8, 5.29pm CEST, there have been 221.6 million confirmed cases of Covid-19, with 4.5 million deaths, according to the latest information from the World Health Organization (WHO). As of September 6, a total of 5.3 billion vaccine doses have been administered around the world, WHO data shows.

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