Brent to average $103/bbl in 2H then dip as the market rebalances - EIA
Brent is forecast to average $103/bbl in second half of this year, before falling to $97/bbl next year, the US Energy Information Administration (EIA) said in its latest short-term outlook.
PHOTO: Oil refinery complex with big American flag displayed. Fumes coming out from the chimney. Getty Images
The EIA cautions that the forecast is highly uncertain and that the actual Brent price will depened on how current and future Russian sanctions evolves. The projections were made on 5 May, prior to the EU's proposal to ban Russian oil imports, it said.
The EIA goes on to say that Russian oil sanctions have come at a time when oil inventories had already been drawn heavily, resulting in extra upward pressure to crude prices. It estimates global inventories were drawn at a rate of 1.7 million b/d between 2020 and 2021. Commercial OECD inventories ended the first quarter at 2.63 billion bbls, the lowest since April 2014, it said.
The EIA has lowered its 2022 global petroleum and liquid consumption estimate by 200,000 b/d to 99.6 million b/d, mainly due to slower demand growth from major consumers China and the US. Demand is expected to pick up next year, with consumption touching 101.5 million b/d.
US oil production is projected to increase to 12.8 million b/d next year, from this year’s production estimate of 11.9 million b/d.
The oil market is expected to balance out from second half this year and throughout next year.
