WASHINGTON (Pakistan Point News / Sputnik - 13th January, 2021) Brent crude is expected to fetch $53 per barrel on the average this year and next, the US Energy Information Administration said on Tuesday, raising by $4 its reading for the global oil benchmark from a previous forecast of $49 in December.
"EIA forecasts Brent crude oil spot prices to average $53 per barrel in both 2021 and 2022, compared with an average of $42/b in 2020," the agency said in its Short-Term Energy Outlook for January.
Brent hovered at $56 per barrel on Tuesday, versus its 2020 close of $51.80.
The EIA also said it expected the Organization of the Petroleum Exporting Countries, oil's powerful cartel often known by its acronym OPEC, to pump more crude this year despite output cuts recently announced by the group's chair Saudi Arabia.
The EIA said it expected OPEC to produce 27.2 million barrels per day this year, up from the 25.6 million it estimated for 2020.
Saudi Arabia surprised oil traders last week by announcing that it will cut an additional 1.0 million barrels per day from its output in February and March, on top of reductions the kingdom had already committed to under an OPEC agreement aimed at shoring up crude prices.
Notwithstanding the Saudi reductions, the 13-member OPEC and its 10 allies, including Russia, agreed to add 500,000 barrels to their joint output from January, effectively trimming production cuts carried out an OPEC agreement since April.
The EIA said in making its forecast for 2021, it had considered the additional Saudi cuts for February and March. But it offset them against higher production expected from Libya, which has been pumping crude almost without restraint since the end of a civil war last year that previously blocked shipments from the North African country.
For 2022, the EIA forecast that OPEC production will rise by 1.1 million barrels per day.
"[The] forecast growth in output reflects OPEC's announced increases to production targets and continuing rise in Libya's production," it said.
For US crude alone, the agency forecast that production will fall to 11.1 million barrels per day this year before rising to 11.5 million in 2022. In 2020, US crude production fell to 11.3 million barrels per day from a record of 12.2 million in 2019.
