EIA sees Brent to average at $92/bbl next year as global oil inventory declines

Potential supply disruptions and slower production growth are likely to offset any downward pressure, the US Energy Information Administration (EIA) writes in its December short-term energy outlook report.

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It sees global oil inventories to decline by 0.2 million b/d in the first half of next year, which would “push Brent prices back above $90/bbl by the beginning of the second quarter of 2023.” However, it expects oil stocks to rise by 0.7 million b/d in the second half of next year.

EIA forecasts that crude oil output from OPEC member nations will average at 28.67 million b/d in the first quarter of next year, and 29 million b/d throughout the year.

It says that the EU sanctions against Russia are creating a "significant uncertainty" for global oil prices and expects that most of the Russian crude would now be diverted to new destinations outside the Europe.

Meanwhile, EIA sees a drop in Russian oil production to 9.49 million b/d in 2023 as various countries reduce their imports from Russia.

The EU sanctions on seaborne imports of Russian crude oil took effect December 5, while sanctions on petroleum products will take effect February 5. Also, the G7 nations have capped Russian seaborne crude imports at $60/bbl.

With the US lifting oil sanctions on Venezuela and Chevron receiving a license to restart oil production, the EIA expects Venezuela's production to rise in the first quarter of next year.

By Konica Bhatt

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