Crude Oil: EIA’s Predictions For Prices In The Coming Years

In the final quarter of 2021, the price of Brent crude oil, the international pricing benchmark, found the middle value of $79 per barrel (b). The declining price are driven by a shift from global petrol inventory during 2021 to stock expansions in 2022 and 2023.

Global petrol inventories decline when consumption is more bigger than production and increase when production is more prominent than consumption.

In 2021, withdrawals from global oil inventories reached at the midpoint of 1.4 million barrels each day (b/d) and added to higher unrefined petroleum costs. These stock draws came about because of oil consumption returning faster than petroleum production after the COVID-19 pandemic started in 2020.

In 2022, the assumption is that, petroleum production will increase and consumption growth will slow, leading to increases in petroleum inventories globally.

The Energy Information Administration (EIA) expects global oil production to increase by 5.5 million b/d in 2022, driven by production expansions in the United States, OPEC, and Russia, which together record for 84%, or 4.6 million b/d, of the growth.

Again, the prediction is that, the increased tight oil production in the United States and slowly expanding raw petroleum production from OPEC+ (which includes OPEC individuals and Russia) will represent the majority of the increased raw petroleum production.

According to the institution, global petroleum consumption will increase by 3.6 million b/d in 2022, driven by more consumption in the United States and China, which together account for 39% of the consumption growth.

According to EIA, the global petroleum inventories will increase by 0.5 million b/d in 2022, which will put downward pressure on crude oil prices. They say, the price of Brent crude oil in 2022 will fall from $79/b in the first quarter to $71/b in the fourth quarter.

UAE Suspends The Visa-Free System With Ukraine. Full Details Here

As per EIA, in 2023, they anticipate continued inventory growth, averaging 0.6 million b/d. The global petroleum production will increase by 1.8 million b/d in 2023 from 2022, averaging 102.8 million b/d. In 2023, most of the growth in global petroleum production comes from producers in the United States and Russia.

Production in the United States is predicted to increase by 0.8 million b/d, and production in Russia is forecast to increase by 0.3 million b/d. EIA’s forecast is that, OPEC production will increase by 0.1 million b/d in 2023.

Additionally, EIA predicts that, global petroleum consumption in 2023 will increase by 1.8 million b/d. Like in 2022, the growth is largely driven by rising consumption in the United States and China, which they forecast will account for 43% of the consumption growth in 2023. India’s petroleum consumption growth accounts for another 14% of the global total.