Global oil production to outpace oil consumption in 2022-2023

Oil&Gas Materials 12 January 2022 10:20 (UTC +04:00)
Global oil production to outpace oil consumption in 2022-2023

BAKU, Azerbaijan, Jan.12

By Leman Zeynalova - Trend:

The global oil production is expected to outpace global oil consumption during both 2022 and 2023, resulting in rising global oil inventories, Trend reports with reference to the US Energy Information Administration (EIA).

“We expect global oil inventories will rise by an average of 0.5 million b/d in 2022 and by 0.6 million b/d in 2023 and that these inventory builds will generally put downward pressure on crude oil prices. Brent prices average $75/b in 2022 and $68/b in 2023 in our forecast. However, oil market balances are subject to significant uncertainties during the forecast period, notably, the way in which the ongoing pandemic affects economic growth, oil demand, and the production decisions of OPEC+ members. These factors, among others, could keep oil prices volatile,” reads the latest report released by the EIA.

The US Energy Information Administration notes that in much of the world, vaccines contributed to increased personal travel and business activity, resulting in global oil consumption rising by 5.5 percent in 2021 from 2020.

“However, global consumption in 2021 remained 3% below 2019 levels. For more than a year now, oil consumption has outpaced oil production. Production has remained restrained as a result of crude oil production curtailments by OPEC+ members, investment restraint from U.S. oil producers, and other supply disruptions. Oil consumption outpacing oil production has led to persistent withdrawals from global oil inventories and significant increases in oil prices.

We estimate that global oil inventories have fallen for six consecutive quarters going back to the third quarter of 2020 (3Q20), declining at an average rate of 2.1 million barrels per day (b/d) in 2H20 and at an average rate of 1.4 million b/d in 2021. Brent crude oil spot prices increased from an average of $43 per barrel (b) in 3Q20 to an average of $79/b in 4Q21,” the report says.


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