The US Energy Information Administration (EIA) revised up its forecast for global crude oil prices for 2021, which was announced late Wednesday in its July Short-Term Energy Outlook (STEO).
International benchmark Brent crude is now estimated to average $68.78 per barrel in 2021, up from last month’s forecast of $65.19 a barrel for this year.
The agency projects Brent will average $65.01 per barrel in the first half of 2021 and $72.32 per barrel during the second half of 2021, while prices are forecast to be in the neighborhood of $66.64 per barrel in 2022.
American benchmark West Texas Intermediate (WTI) is expected to average $65.85 for 2021 and $62.97 next year.
The agency said Brent prices averaged $73 per barrel in June, up by $5 per barrel from May and $33 per barrel higher than in June of last year, with the increase in economic activity and easing of the COVID-19 pandemic.
The EIA expects that in the coming months, global oil production, largely from OPEC+ members, will increase by more than global oil consumption. It also predicts that rising production will reduce the persistent global oil inventory draws that have occurred for much of the past year, keeping prices similar to current levels with an average of $72 per barrel during the second half of 2021.
- US crude output for 2021 remains unchanged
The agency forecast that OPEC crude oil production will average 26.8 million barrels per day (bpd) in 2021 and 28.6 million bpd in 2022, slightly down from the agency's previous forecast, as OPEC and its OPEC+ partners are expected to continue to increase crude oil production beyond July in response to rising global oil consumption.
'Although our forecast assumes current US sanctions remain in place for Iran and Venezuela for the entire forecast period, we expect Iran will increase crude oil supply somewhat in the coming months,' it said, adding “we also expect that OPEC+ will not implement further production cuts to accommodate any potential increases in oil output from Iran or Venezuela.”
US crude oil production is estimated to average 11.1 million bpd in 2021, unchanged from the previous STEO, but will rise to an average of 11.9 million bpd in 2022.
According to the agency, total world consumption of petroleum and liquid fuels will average 97.6 million bpd for all of 2021, marking a rise of 5.3 million bpd from 2020. This is slightly down 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 Firdevs Yuksel