EIA expects global oil inventories to fall to1.8 million b/d.

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The United States Energy Information Adminiostration ( EIA) says it  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. However, the 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..

This was contained its April Short-Term Energy Outlook (STEO)

It stated that the April Short-Term Energy Outlook (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 during the past year and will continue to affect these patterns in the future.

Brent crude oil spot prices averaged $65 per barrel (b) in March, up $3/b from February and up $33/b from March 2020, the onset of the COVID-19 pandemic in the United States. Rising Brent prices in March continued to reflect expectations of rising oil demand as both COVID-19 vaccination rates and global economic activity have increased, combined with ongoing crude oil production limits from members of the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+). EIA forecasts that Brent prices will average $65/b in the second quarter of 2021, $61/b during the second half of 2021, and $60/b in 2022.

 

The agency says it 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. However, the 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.

 

It however 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.

It 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.

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