The US Energy Information Administration (EIA) on Tuesday revised up its 2022 forecast for global crude oil prices on the back of “heightened levels of uncertainty” resulting from a variety of factors, including Russia’s full-scale invasion of Ukraine.
In the June Short-Term Energy Outlook (STEO), the EIA revised up the price of Brent crude to an average of $107.37 per barrel and American benchmark West Texas Intermediate (WTI) to $102.47 a barrel in 2022. These figures were 103.35 and 98,20, respectively, in the last month's report.
In 2023, the agency predicts that Brent will decline to $ 97.24 per barrel, while WTI will fall to $ 93.24 a barrel.
However, the EIA cautioned that the price forecast is 'highly uncertain,' driven by a range of factors including how sanctions affect Russia’s oil production, the production decisions of OPEC+, and the rate at which U.S. oil and natural gas producers increase drilling.
The agency pointed to some other key uncertainties expected to affect prices including the impact and pace of sanctions on Russia, potential new sanctions, pace of petroleum demand growth through the summer and the potential for demand destruction because of high retail fuel prices.
According to the statistic agency, the ongoing impact of the coordinated release of petroleum supplies from strategic reserves in the US and in Europe, geopolitical uncertainties in Libya and Yemen along with potential new developments on an Iran deal will also be important for oil price formation in the coming months.
The agency forecast that Russia’s production of total liquid fuels will decline from 11.3 million barrels per day (bpd) in the first quarter of 2022 to 9.3 million bpd untill the end of next year.
Noting that the EU crude oil import ban will be imposed in six months and the petroleum product import ban in eight months, the agency said the possibility that these sanctions or other potential future sanctions reduce Russia’s oil production by more than expected “creates upward risks for crude oil prices during the forecast period.”
-US crude oil production increases
The agency forecast that global oil demand will grow by 2.3 million bpd in 2022 reaching 99.6 million bpd and 101.3 million bpd in 2023.
Crude oil output in the US is forecast to average 11.92 million bpd in 2022, up from 11.2 million bpd in 2021.
In 2023, crude oil output in the country is expected to reach 12.97 million bpd.
The agency forecast that OPEC crude oil production will average 28.8 million bpd in 2022, up 2.52 million bpd from 2021, and 29.45 million bpd in 2023.
By Sibel Morrow