The U.S. Energy Information Administration (EIA) has raised its Brent and West Texas Intermediate (WTI) oil price forecasts for 2021 and 2022, its February short term energy outlook (STEO) report has revealed.
The EIA now sees Brent spot prices averaging $53.20 per barrel this year and $55.19 per barrel next year and WTI spot prices averaging $50.21 per barrel this year and $51.56 per barrel next year.
The previous STEO, which was released in January, saw Brent spot prices averaging $52.70 per barrel in 2021 and $53.44 per barrel in 2022. It projected that WTI spot prices would average $49.70 per barrel in 2021 and $49.81 per barrel in 2022.
In its latest STEO, the EIA highlighted that Brent spot prices averaged $55 per barrel in January, which it noted was up $5 per barrel from the December average but $9 per barrel lower than the average in January last year, reports Rigzone.
“Higher Brent prices in January largely reflected the January 5 announcement by Saudi Arabia that it would unilaterally cut one million barrels per day of crude oil production in February and March, in addition to the reduced production levels on which the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+) previously agreed,” the EIA stated in its latest outlook.
“The EIA expects Brent crude oil prices will average $56 per barrel in the first quarter of 2021 and $52 per barrel over the remainder of the year,” the EIA added.
“EIA expects lower oil prices later in 2021 as a result of rising oil supply that will slow the pace of global oil inventory withdrawals. EIA also expects that high global oil inventory levels and spare production capacity will limit upward price pressures,” the EIA went on to state.
The organization noted that its latest STEO remains subject to heightened levels of uncertainty because responses to Covid-19 continue to evolve.
“Reduced economic activity related to the Covid-19 pandemic has caused changes in energy demand and supply over the past year and will continue to affect these patterns in the future,” the EIA stated.