BAKU, Azerbaijan, Feb.10
By Leman Zeynalova - Trend:
The U.S. Energy Information Administration (EIA) expects Brent crude oil prices will average $56/b in the first quarter of 2021 and $52/b over the remainder of the year, Trend reports.
EIA expects lower oil prices later in 2021 as a result of rising oil supply that will slow the pace of global oil inventory withdrawals. EIA also expects that high global oil inventory levels and spare production capacity will limit upward price pressures. EIA expects Brent prices will average $55/b in 2022.
“Brent crude oil spot prices averaged $55 per barrel in January, up $5/b from the December average but $9/b lower than the average in January of last year. Higher Brent prices in January largely reflected the January 5 announcement by Saudi Arabia that it would unilaterally cut 1.0 million barrels per day (b/d) of crude oil production in February and March, in addition to the reduced production levels on which the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+) previously agreed,” reads the latest EIA report.
EIA estimates that the world consumed 93.9 million b/d of petroleum and liquid fuels in January, which is down 2.8 million b/d from January 2020. EIA forecasts that global consumption of petroleum and liquid fuels will average 97.7 million b/d for all of 2021, which is up by 5.4 million b/d from 2020. EIA forecasts that consumption of petroleum and liquid fuel will increase by 3.5 million b/d in 2022 to average 101.2 million b/d.
Sustained production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+) continued to put upward pressure on crude oil prices in January, according to EIA.
In early December, OPEC+ announced it would limit production increases planned for early 2021. Then in early January, OPEC+ largely reaffirmed those limits, and Saudi Arabia announced on January 5 that it would unilaterally cut an additional 1.0 million barrels per day (b/d) of production in February and March. In addition to the OPEC+ supply reductions, expectations for increasing petroleum demand as a result of the rollout of COVID-19 vaccines are further supporting oil prices. Brent crude oil prices settled at more than $55/b on all but one day since January 8, marking the highest levels since the early days of the pandemic in late-February 2020. However, new government mobility restrictions in response to COVID-19 during the Lunar New Year holiday season in China and increased restrictions on travel in Europe both present the potential to keep petroleum demand lower than might otherwise be expected.
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