The US Energy Information Administration (EIA) revised down its forecast for global crude oil prices for 2021, the EIA announced late Tuesday in its April Short-Term Energy Outlook (STEO).
International benchmark Brent crude is now estimated to average $62.26 per barrel in 2021, down from April report's forecast of $62.28 a barrel for this year.
The agency projects Brent will average $65.25 per barrel in the second quarter of 2021 and $60.50 per barrel during the second half of 2021, while the prices are forecast to be in the neighborhood of $61 per barrel in 2022.
American benchmark West Texas Intermediate (WTI) is expected to average $58.91 for 2021 and $56.99 next year.
The agency said Brent prices were steady in April as market participants considered diverging trends in global COVID-19 cases.
The upward movements in oil prices in April were likely reinforced by macroeconomic indicators that pointed to continued economic recovery while reports of rising COVID-19 cases in India offset some of the expectation of rising demand globally and trimmed the prices.
The agency said it expects upward pressure on the Brent price to ease in May as OPEC+ crude oil production rises to meet gradually increasing crude oil demand.
- US crude output for 2021 revised down
The EIA forecast that OPEC crude oil production will average 26.9 million bpd in 2021 and 28.5 million bpd in 2022, which are 0.2 million bpd and 0.4 million bpd higher, respectively, than the agency’s previous forecast.
“The higher forecast OPEC production mainly reflects our expectation that crude oil production in Iran will continue to increase, continuing the rising output trend that started in November 2020,” the EIA said.
The agency noted that even though sanctions that target Iran’s crude oil exports remain in place, crude oil exports from Iran have been rising since the end of 2020, driving up crude oil production.
The statistics agency revised up US crude oil production to average 11.2 million bpd in 2021 compared to 11.0 million bpd in the previous STEO.
Estimated to rise to 11.8 million bpd in 2022, the country’s oil production was 11.3 million bpd in 2020 and 12.2 million bpd in 2019.
"Because the average price of West Texas Intermediate crude oil remains above $55/b in our forecast, we expect producers will drill and complete enough wells in the coming months to offset declines at existing wells. In addition, new projects in the Federal Offshore Gulf of Mexico contribute to rising production in the forecast," the EIA explained.
According to the agency, total world consumption of petroleum and liquid fuels will average 97.7 million bpd for all of 2021, marking a rise of 5.4 million bpd from 2020. This is unchanged from the previous forecast.
The agency also estimated that global consumption next year would increase by 3.7 million bpd to average 101.4 million bpd.
By Sibel Morrow