The U.S. Energy Information Administration (EIA) has raised its Brent and West Texas Intermediate (WTI) oil price forecasts again, the organization’s July Short Term Energy Outlook (STEO) report has revealed.
According to the latest STEO, the EIA now expects the Brent spot price to average $40.50 per barrel in 2020 and $49.70 per barrel in 2021. In the EIA’s June STEO, the Brent spot price was expected to average $38.02 per barrel in 2020 and $47.88 per barrel in 2021. Back in May’s STEO, the 2020 and 2021 Brent spot price was projected to average $34.13 and $47.81 per barrel, respectively.
In July’s STEO, the WTI spot price is expected to average $37.55 per barrel this year and $45.70 per barrel next year. In June these prices were forecasted to hit $35.14 per barrel in 2020 and $43.88 per barrel in 2021 and in May they came in at $30.10 per barrel in 2020 and $43.31 per barrel in 2021.
“Oil prices rose in June as numerous regions worldwide began to lift stay at home orders and as global oil supply fell as a result of production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+),” the EIA stated in its latest STEO.
“The forecast of rising crude oil prices reflects EIA’s expectation of declines in global oil inventories during the second half of 2020 and through 2021,” the EIA added.
“EIA expects high inventory levels and surplus crude oil production capacity will limit upward price pressures in the coming months, but as inventories decline into 2021, those upward price pressures will increase,” the EIA continued.
The EIA estimates that global liquid fuels inventories rose at a rate of 6.7 million barrels per day (MMbpd) in the first half of 2020. The organization expects they will decline at a rate of 3.3MMbpd in the second half of this year and then decline by a further 1.1MMbpd in 2021.
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