The U.S. Energy Information Administration (EIA) has raised its Brent and West Texas Intermediate (WTI) average price forecast for 2021, according to its latest short-term energy outlook (STEO) report released last Monday.
In its January STEO report, the EIA expects Brent crude prices to average $52.70 per barrel and WTI prices to average $49.70 per barrel in 2021. The EIA had revealed in its December STEO that it saw 2021 Brent prices averaging $48.53 per barrel and WTI prices averaging $45.78 per barrel.
Oil prices are further expected to increase in 2022, according to the EIA’s January STEO report, which projects a Brent to average $53.44 next year and a WTI to average $49.81.
The upward revision comes amid a tighter global supply outlook. OPEC production is now expected to average at 27.2 million in 2021, the EIA said.
Saudi Arabia announced at the end of the January 5 OPEC+ meeting that it would voluntarily slash its February and March crude production by 1 million barrels per day.
OPEC production is forecast to rise 1.1 million barrels per day in 2022, EIA said.
The EIA also estimates that global consumption of petroleum and liquid fuels averaged 92.2 million barrels per day for all of 2020, which it said was down nine million barrels per day from 2019. The organization expects global liquid fuels consumption will grow by 5.6 million barrels per day in 2021 and by 3.3 million barrels per day in 2022.
The EIA noted that the pace of the oil demand recovery is dependent on the effectiveness of vaccine distribution programs worldwide, and the demand is not expected to reach pre-pandemic levels until early 2022.
The EIA is the statistical and analytical agency within the U.S. Department of Energy.