Global oil prices to remain at current level this year, to decline next year: EIA

Houston, U.S. | Xinhua | The U.S. Energy Information Administration (EIA) forecast in a report on Tuesday that global crude oil prices will remain near current levels for the remainder of 2021 and will decline next year.

In its August’s Short-Term Energy Outlook (STEO), EIA said Brent crude oil spot prices averaged 75 U.S. dollars per barrel in July, up 2 dollars per barrel from June and up 25 dollars per barrel from the end of 2020.

EIA expected Brent prices will remain near current levels for the remainder of 2021, averaging 72 dollars per barrel from August through November. However, in 2022, continuing growth in production from OPEC+ and accelerating growth in U.S. oil production will outpace decelerating growth in global oil consumption and contribute to Brent prices declining to an average of 66 dollars per barrel.

According to EIA. 98.8 million barrels per day (b/d) of petroleum and liquid fuels were consumed globally in July, an increase of 6.0 million b/d from July 2020 but 3.4 million b/d less than in July 2019. EIA forecast that global consumption of petroleum and liquid fuels will average 97.6 million b/d for all of 2021, which is a 5.3 million b/d increase from 2020. Global consumption of petroleum and liquid fuels will increase by 3.6 million b/d in 2022 to average 101.2 million b/d, said the agency.

As for the crude oil production, EIA forecast OPEC crude oil production will average 26.5 million b/d in 2021, up from 25.6 million b/d in 2020. This forecast was higher than EIA’s April one. The expectation of rising OPEC production was primarily based on the assumption that OPEC will raise production through the end of 2021 in line with its targets. EIA expected OPEC crude oil production will rise to an average of 28.7 million b/d in 2022.

EIA said its forecast assumed continuing economic growth and increasing mobility globally. Any developments that would cause deviations from these assumptions would likely cause energy consumption and prices to deviate from its forecast.

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Xinhua