The US Energy Information Administration (EIA) revised up global crude oil prices for 2021, the EIA announced Wednesday in its December Short-Term Energy Outlook (STEO).
International benchmark Brent crude averaged $41.69 a barrel in 2020, and traded within a wide range from $64 a barrel in January 2020, $18 a barrel in April and $50 a barrel in December as a result of significant declines in oil consumption that caused a sharp rise in global oil inventories, the agency explained.
Brent crude oil is now estimated to average $52.70 a barrel in 2021, recording a 8.59% increase compared to the agency's forecast last month.
The EIA also forecast that Brent oil will average $53.44 for 2022.
“Brent prices rose to a monthly average of $50 a barrel in December in part because of expectations of future economic recovery based on continued news about the viability of multiple COVID-19 vaccines. In early January, Brent reached the highest levels in 10 months after Saudi Arabia announced a one-month unilateral cut to its crude oil production for February that is in addition to its OPEC+ commitments,” it said.
American benchmark West Texas Intermediate (WTI) is expected to average $49.70 for 2021 and $49.81 next year, the EIA said, explaining that upward price pressures in 2021 would be limited because of high global oil inventory levels and surplus crude oil production capacity.
- US crude output for 2021 revised down
The statistics agency forecast that OPEC crude oil production would average 27.2 million barrels per day (bpd) in 2021, up from an estimated 25.6 million bpd in 2020.
It said the revision reflects OPEC's announced potential rises to production targets and production increases in Libya.
The EIA said US crude oil production averaged 11.3 million bpd in 2020, down 1 million bpd from 2019 as a result of well curtailment and a drop in drilling activity related to low oil prices.
The agency estimated a production decline in 2021, averaging 11.1 million bpd before increasing to an annual average of 11.5 million bpd in 2022, as prices and drilling conditions become more favorable.
According to the agency, global oil consumption and production will rise during 2021 and 2022, and global oil inventories will continue to decline during much of that period.
After averaging 94.23 million bpd in 2020, global supply is now forecast to average 97.13 million bpd in 2021, instead of the previous estimate of 98.39 million bpd; and will total 100.62 million bpd next year.
The EIA said the total world consumption averaged 92.21 million bpd in 2020 and forecast it will be 97.77 million bpd for this year, down from 98.16 million bpd from the previous STEO.
The agency estimated that global consumption next year will be 101.08 million bpd.
By Sibel Morrow