US Oil Seen Below $50 Per Barrel Through 2021 Due To COVID-19 - Energy Information Agency

WASHINGTON (Pakistan Point News / Sputnik - 07th July, 2020) US oil prices are expected to remain below $50 per barrel through 2021, or at least 20 percent below where they began this year,� due to continued challenges from the COVID-19 pandemic, the Energy Information Administration said in a report Tuesday.

"EIA expects annual average US crude oil production to fall in 2020 and 2021 as forecast West Texas Intermediate (WTI) spot prices remain less than $50/b through 2021," the agency said in its Short-Term Energy Outlook report for July that noted "heightened levels of uncertainty because mitigation and reopening efforts related to the ... COVID-19 (that) continue to evolve."

WTI, the benchmark for US crude prices, began the year at $61 per barrel.� The coronavirus which hit the United States in a big way from March, however, drove WTI down quickly, with prices even reaching minus $37 per barrel in mid-March before recovering to trade at just under $40 now.

For UK-traded Brent, the benchmark for global oil prices, the EIA forecast an average of $41 per barrel during the second half of 2020 and $50/b in 2021. Brent began 2020 at $66 per barrel.

"Reduced economic activity related to the COVID-19 pandemic has caused changes in energy supply and demand patterns in 2020," the EIA said, adding that "uncertainties persist across the ... outlook for all energy sources, including liquid fuels, natural gas, electricity, coal, and renewables."

Due to the COVID-19 also, the EIA said it expected US crude production to average 11.6 million barrels per day in 2020 and 11 million in 2021, down 600,000 and 1.2 million, respectively, from the 2019 average of 12.2 million.