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The US authorities stated that they have lowered their price outlook for 2021-2022.
When the U.S. Energy Information Administration lowered its price outlook for 2021-2022, it said that due to concerns that travel restrictions will continue into next year, global crude oil demand in 2021 and 2022 will be lower than previous forecasts.
Although the surge in demand is lower than expected, EIA still predicts that global consumption will increase by 5 million barrels/day this year, and another 3.6 million barrels/day in 2022, resulting in a total of 101 million barrels/day.
In its “Short-Term Energy Outlook” (STEO), EIA pointed out that since the pandemic has no obvious signs of ending, and concerns about the spread of delta variants are increasing, market concerns about the impact of oil demand are contributing to the continued price of crude oil. Fell. In September.
EIA lowered its 2021 Brent crude oil spot price estimate by 10 cents/barrel to US$68.61/barrel, while maintaining its 2022 estimate at US$66.04/barrel. Similarly, the agency lowered its 2021 estimate for WTI crude oil prices by 24 cents/barrel to $65.69/barrel, and expects that the price will further fall to an average of $62.37/barrel in 2022.
The agency stated that the steady consumption of global oil inventories has caused oil prices to rise in the past year after the plunge at the beginning of the pandemic, but “the production growth of OPEC+, U.S. tight oil and other non-OPEC countries will exceed global oil consumption and contribute to “2022. Oil prices fell in the year”.
The agency believes that OPEC will increase by 1.4 million barrels/day in 2022, reaching a total of 28.34 million barrels/day, which means that OPEC+ transactions are likely to be extended to 2023 and beyond.
According to STEO data, the average US oil production this year is 11.08 million barrels per day, and next year it will increase to 11.72 million barrels per day.
“In September’s STEO, we lowered our global liquid fuel consumption forecasts for 2021 and 2022 by 200,000 barrels per day. The decline in consumption reflects lower GDP forecasts and consumption due to travel and other restrictions. Decrease expectations to increase COVID-19 cases,” EIA said in its forecast.
The agency predicts that OPEC’s crude oil production in 2021 will average 26.4 million barrels/day, a decrease of 100,000 barrels/day from August’s STEO, reflecting its expectation that Iran’s crude oil production in the second half of 2021 (2H21) will be lower than its previous forecast.
“We expect OPEC’s daily production to be 28.3 million barrels in 2022, which is a decrease of 300,000 barrels per day compared to August’s STEO. The downward adjustment in supply growth is due to the slowdown in global oil demand growth, and we expect some producers to continue to curb production. , In order to maintain a relatively balanced oil market in 2022,” EIA experts said.
The average spot price of Brent crude oil in August was US$71 per barrel, which was US$4/barrel lower than in July, but US$26/barrel higher than in August 2020. Due to the steady consumption of global oil inventories, Brent crude oil prices have risen in the past year, with an average of US$1.8 million. EIA said the number of barrels per day (b/d) in the first half of 2021 (1H21).
“We expect Brent crude oil prices to remain near current levels for the remainder of 2021, averaging US$71/barrel in the fourth quarter of 2021 (the fourth quarter of 2021). By 2022, we expect OPEC+, The production growth of tight oil in the United States and other non-OPEC countries will exceed the slowing growth in global oil consumption and cause the price of Brent crude oil to drop to an average of US$66 per barrel per year,” the EIA report said. issacjohn@khaleejtimes.com
Isaac John
The editorial director of Khaleej Times is a well-connected Indian journalist and economic and financial commentator. He has worked in mainstream journalism in the UAE for 35 years, including 23 years in Khaleej Times. He is a graduate of English major and a graduate of economics major, and has won more than 20 awards. He is widely praised for his real and insightful analysis of global and regional business and economic trends, and is respected for his keen understanding of local business scenarios.
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