EIA STEO raised its forecast for 2021 world oil demand up 180,000 up to 5.5M. In 2022 it sees world oil demand to decrease by 180K to 3.65M BPD. At the same time sees crude oil output in 2021 to fall 270K to 11.04M and t in 2022 unchanged increase by 820K to 11.86M.
EIA raised its forecast for 2021 world oil demand up 180,000 up to 5.5M. In 2022 it sees world oil demand to decrease by 180K to 3.65M BPD. At the same time sees crude oil output in 2021 to fall 270K to 11.04M (vs 160K BPD decline). Crude oil output in 2022 unchanged increase by 820K to 11.86M.
The EIA said April Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve. U.S. gross domestic product (GDP) declined by 3.5% in 2020 from 2019 levels.
This STEO assumes U.S. GDP will grow by 5.6% in 2021 and by 4.2% in 2022. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit.
Highlights
- 2021 world oil demand to increase 180K to 5.5M
- 2022 world oil demand to decrease by 180K to 3.65M BPD
- Crude oil output in 2021 to fall 270K to 11.04M (vs 160K BPD decline)
- Crude oil output in 2022 to increase by 820K to 11.86M, unchanged from precious estimate.
- EIA expects global oil inventories to fall by 1.8 million b/d in the first half of 2021.
- Forecast increases in global oil supply will contribute to a mostly balanced market during the second half of 2021.
Forecast depends heavily on future production decisions by OPEC+, the responsiveness of U.S. tight oil production to oil prices, and the pace of oil demand growth, among other factors.
EIA estimates that the world consumed 96.0 million b/d of petroleum and liquid fuels in March, an increase of 4.7 million b/d from March 2020. We forecast that global consumption of petroleum and liquid fuels will average 97.7 million b/d for all of 2021, which is up by 5.5 million b/d from 2020. We forecast that consumption will increase by 3.7 million b/d in 2022 to average 101.3 million b/d. We revised growth in global liquid fuels consumption in 2021 higher from last STEO. The higher forecast is primarily a result of higher global GDP growth forecasts from Oxford Economics, which increased 0.4 percentage points from the March STEO to 6.2% for 2021.
EIA estimates that the world consumed 96.0 million b/d of petroleum and liquid fuels in March, an increase of 4.7 million b/d from March 2020. They forecast that global consumption of petroleum and liquid fuels will average 97.7 million b/d for all of 2021, which is up by 5.5 million b/d from 2020.
EIA forecast that consumption will increase by 3.7 million b/d in 2022 to average 101.3 million b/d. EIA revised growth in global liquid fuels consumption in 2021 higher from last STEO. The higher forecast is primarily a result of higher global GDP growth forecasts from Oxford Economics, which increased 0.4 percentage points from the March STEO to 6.2% for 2021.
EIA expects OPEC crude oil production will rise from an average of 25.1 million b/d in the first quarter of 2021 to 25.8 million b/d in the second quarter. The increase is the result of the April 1 OPEC+ announcement to begin raising production targets in May. It also reflects Saudi Arabia unwinding voluntary cuts of 1.0 million b/d between May and July. We expect OPEC crude oil production will rise to almost 27.9 million b/d in the second half of 2021.
US Crude Production
U.S. domestic crude oil production averaged 11.1 million b/d in January 2021. EIA estimate that U.S. domestic crude oil production declined by 0.8 million b/d in February, mostly because of cold temperatures that affected much of the country, particularly Texas.
EIA forecast crude oil production will average 10.9 million b/d in the second quarter of 2021 and increase to almost 11.4 million b/d by the fourth quarter of 2021. We expect U.S. crude oil production will average 11.9 million b/d in 2022.
The forecast of rising U.S. crude oil production is the result of our expectation that West Texas Intermediate crude oil prices will remain above $55/b through the forecast period.
Source: EIA
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