The US Energy Information Administration (EIA) on Tuesday revised down its 2022 forecast for global crude oil prices on the back of heightened levels of uncertainty resulting from a variety of factors, including Russia's further invasion of Ukraine.
In the April Short-Term Energy Outlook (STEO), the EIA revised down the price of Brent crude to an average of $103.37 per barrel and American benchmark West Texas Intermediate (WTI) to $97.96 a barrel. These figures were 105.92 and 101,17, respectively, in the last month's report.
In 2023, the agency predicts that Brent will decline to $ 92.57 per barrel, while WTI will fall to $ 88.57 a barrel.
However, the EIA cautioned that the price forecast is 'highly uncertain,' as actual price outcomes will depend on the degree to which existing sanctions imposed on Russia, any potential future sanctions, and independent corporate actions affect Russia's oil production or the sale of Russia's oil in the global market.
The agency pointed to high level of energy supply uncertainties and said the conflict in Ukraine, the production decisions of OPEC+, and the rate at which US oil and natural gas producers increase drilling will be the main drivers of price uncertainties during the rest of the year.
According to the statistic agency, the degree to which other oil producers respond to current oil prices, as well as the effects that macroeconomic developments might have on global oil demand will also be important for oil price formation in the coming months.
Despite reduction in Russian oil production, the agency said the global oil inventories will build at an average rate of 500,000 barrels per day until the end of 2023, which is expected to put downward pressure on crude oil prices.
'If production disruptions—in Russia or elsewhere—are more than we forecast, resulting crude oil prices would be higher than our forecast,' it added.
-US crude oil production reaches all-time-high
Pointing out that supply side risks will also impact global oil consumption, the agency forecast that global oil demand will grow by 2.4 million bpd in 2022 reaching 99.8 million bpd and 101.7 million bpd in 2023.
Crude oil output in the US is forecast to average 12 million bpd in 2022, up from 11.2 million bpd in 2021.
In 2023, crude oil output in the country is expected to reach its highest annual average on record at 13 million bpd. The previous annual-average record was 12.3 million bpd in 2019.
The agency forecast that OPEC crude oil production will average 28.81 million bpd in 2021, up 2.53 million bpd from 2021, and 29.37 million bpd in 2023.
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr