The U.S. Energy Information Administration (EIA) has raised its oil price forecasts for 2020 and 2021, its latest short-term energy outlook (STEO) has revealed.
Brent spot prices are now expected to average $34.13 this year and $47.81 in 2020. The EIA’s April STEO had these figures at $33.04 in 2020 and $45.62 in 2021. WTI spot prices are expected to average $30.10 this year and $43.31 next year, according to the EIA’s latest STEO. The organization’s previous STEO forecasted WTI averages of $29.34 in 2020 and $41.12 in 2021.
The EIA expects global petroleum and liquid fuels demand will average 92.6 million barrels per day (MMbpd) this year, which is lower than the 95.5MMbpd figure projected last month. This is now anticipated to grow by 7MMbpd in 2021. April’s STEO predicted a growth of 6.4MMbpd next year.
Lower global oil demand growth for 2020 in the May STEO reflects “growing evidence of disruptions to global economic activity along with reduced expected travel globally as a result of restrictions related to COVID-19,” the EIA stated.
The EIA revised down projected U.S. crude oil production figures in its latest STEO “as a result of lower crude oil prices”. Output is now expected to average 11.7MMbpd in 2020 and reduce by a further 0.8MMbpd next year. U.S. crude oil production was previously expected to average 11.8MMbpd this year and contract by a further 0.7MMbpd in 2021.
Global liquid fuels inventories are currently expected to grow by an average of 2.6MMbpd in 2020. These were forecasted to grow by an average of 3.9MMbpd this year back in April. Global liquid fuels inventories are now expected to fall by 1.9MMbpd in 2021. They were previously expected to fall by 1.7MMbpd next year.
“Firmer demand growth as the global economy begins to recover, and slower supply growth, will contribute to global oil inventory draws beginning in the third quarter of 2020,” the EIA said.
The EIA is the statistical and analytical agency within the U.S. Department of Energy. It collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment, according to its website.
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