BAKU, Azerbaijan, Jan.17
By Leman Zeynalova – Trend:
The global oil markets were roughly balanced in 2019, as global oil supply declined slightly and global oil consumption grew at its slowest pace since 2011, the US Energy Information Administration (EIA) said in its January Short-term Energy Outlook (STEO), Trend reports.
EIA expects global oil supply will rise by 1.6 million barrels per day (b/d) in 2020 and global oil consumption will rise by 1.3 million b/d, contributing to global oil inventories rising at a pace of 0.3 million b/d.
Supply growth in 2020 is led by countries that are not members of the Organization of the Petroleum Exporting Countries (OPEC), particularly the United States, Norway, Brazil, and Canada.
EIA expects non-OPEC producers will increase oil supply by 2.6 million b/d in 2020, which will more than offset forecast supply declines of 1.0 million b/d from OPEC members.
In the first half of 2020, EIA expects global oil inventory builds of 0.5 million b/d will contribute to Brent spot prices falling to an average of $62 per barrel (b) by May from an average of $67/b in January.
The relatively weak market balances EIA is forecasting for the first six months of 2020 occur amid market concerns about potential supply disruptions. However, a forecast of inventory growth and OPEC spare capacity of more than 2.0 million b/d could help reduce upward price pressure in the case of a limited disruption to oil supply or transportation.
For all of 2020, EIA forecasts that global oil inventories will build by 0.3 million b/d and Brent prices will average $65/b.
Oil balances in EIA’s forecast begin to tighten in mid-2020, and in 2021, global oil supply growth slows.
Non-OPEC supply growth slows to 0.9 million b/d in 2021, driven by a decelerating pace of growth in U.S. tight oil.
EIA expects OPEC supply to add another 0.1 million b/d of growth, bringing total forecast global supply growth for 2021 to 1.0 million b/d. EIA forecasts global oil consumption growth will average 1.4 million b/d in 2021, and with consumption growth outpacing supply growth, EIA expects inventories to draw by 0.2 million b/d. These draws contribute to EIA’s forecast that Brent prices will rise to an average of $68/b in 2021.
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