EIA Expects Oil Prices Retreat as Production Begins to Top Demand
Amidst rising prices in the global market, the Energy Information Administration (EIA) said it expects oil prices to begin dropping in March as rising production begins to raise global oil inventories.
In its monthly Short-Term Energy Outlook, the agency said it expects Brent crude prices to average US$90 per barrel in February, but sees the oil benchmark averaging US$87 per barrel in the first quarter and US$75 per barrel in the fourth quarter.
“We expect Brent prices will average $90/b in February as continuing draws in global oil inventories in our forecast keep crude oil prices near current levels in the coming months.
“However, we expect downward price pressures will emerge in the middle of the year as growth in oil production from OPEC+, the United States, and other non-OPEC countries outpaces slowing growth in global oil consumption.
“This dynamic leads to rising global oil inventories from 2Q22 through the end of 2023,” the EIA noted.
The EIA said January oil demand rose by 6.6-million barrels from the year-prior month to 99.0-million barrels per day and it expects demand to average 100.6-million bpd over 2022, with a further rise of 1.9-million bpd in 2023.
The agency raised its forecast for US oil production to average 12-million bpd this year, up from its January estimate of 11.8-million bpd, and 12.6-million bpd in 2023, above the country’s record output of 12.3-million bpd in 2019.
#EIA Expects Oil Prices Retreat as Production Begins to Top Demand
