WASHINGTON (Pakistan Point News / Sputnik - 09th February, 2021) US government forecasters expect Brent crude oil prices to average $56 per barrel in the first quarter and $52 over the rest of the year, the Energy Information Administration said in an outlook published Tuesday.
"EIA expects lower oil prices later in 2021 as a result of rising oil supply that will slow the pace of global oil inventory withdrawals," the agency said in its February Short-Term Energy Outlook. "Brent crude oil prices will average $56/b in the first quarter of 2021 and $52/b over the remainder of the year."
For 2022, the EIA expected Brent, the international indicator for crude oil, to return to an average of $55 per barrel.
For this year, the agency said it expects "high global oil inventory levels and spare production capacity" to limit upward price pressures.
The EIA did not, however, break its estimates for 2021 inventory and supply. Instead it cited expectations for consumption, which appeared higher than a year ago.
The EIA forecast that global consumption of petroleum and liquid fuels will average 97.7 million barrels per day this year, or 5.4 million higher from 2020. For January though, the consumption was still lower than a year ago, with an estimated 93.9 million barrels per day of petroleum and liquid fuels consumed, versus the January 2020 usage of 2.8 million.
For 2020, the EIA forecast that petroleum and liquid fuels consumption will increase by 3.5 million barrels per day in 2022 to average 101.2 million.
Turning to the United States, the EIA said production of US crude was expected to rise June onwards due to the price projections for West Texas Intermediate crude staying elevated at near or higher than $50 per barrel.
While US drilling for oil has slowed since 2020 due to economic fallout from the COVID-19, production will likely increase in the second half of 2021 and in 2022 as output from new wells exceed the declines from legacy wells.
The EIA estimated that US crude production will average 11.0 million barrels per day in 2021 - still lower than the 2020 volume of 11.3 million and 2019 output of 12.2 million - and rise to 11.5 million in 2022.
