BAKU, Azerbaijan, Jan.13
By Leman Zeynalova - Trend:
Brent crude oil prices will average $53/b in both 2021 and 2022, the US Energy Information Administration (EIA) said in its January Short-term Energy Outlook (STEO), Trend reports.
Saudi Arabia’s unilateral cut means global oil market balances will be tighter in early 2021 than EIA had previously expected.
EIA expects global oil inventories will fall by 2.3 million b/d in the first quarter of 2021, which will contribute to Brent prices averaging $56/b.
Despite rising forecast oil prices in early 2021, EIA still expects upward price pressures to be limited through the forecast period because of high global oil inventory levels and surplus crude oil production capacity. EIA expects moderate downward oil price pressures to emerge beginning the second quarter of 2021, when global oil production is forecast to rise and cause inventories to draw at a slower pace.
Brent spot prices are forecast to average $51/b during the second half of 2021. Upward price pressures reemerge in the forecast during 2022 as a result of global oil inventory draws accelerating compared with the second half of 2021.
Global economic developments and numerous uncertainties surrounding the ongoing COVID-19 pandemic in the coming months could push oil prices higher or lower than EIA’s current price forecast. This price path reflects global oil consumption increasing by 6 percent from 2020 levels to reach an average of 97.8 million b/d in 2021 and by an additional 3 percent in 2022. But this forecast is dependent on the rate at which populations are vaccinated and the way in which oil consumption behavior changes once populations are widely vaccinated. The duration of, and adherence to, the latest targeted OPEC+ production cuts also remains uncertain. Lastly, the degree to which the U.S. shale industry responds to the recent relative strength in oil prices compared with their recent lows in April will affect the oil price path in the coming quarters.
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