EIA says Energy Outlook in June Still subject to heightened of Uncertainty

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Energy Information Administration has said  the June Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty related to the ongoing economic recovery from the COVID-19 pandemic. The U.S. economy continues to rise after reaching multiyear lows in the second quarter of 2020 (2Q20).

The increase in economic activity and easing of the COVID-19 pandemic have contributed to rising energy use. U.S. gross domestic product (GDP) declined by 3.5% in 2020 from 2019 levels.

“This STEO assumes U.S. GDP will grow by 6.7% in 2021 and by 4.9% in 2022. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Mark it”.

 

“Our forecast assumes continuing economic growth and increasing mobility as a result of the easing of the COVID-19 pandemic. Any developments that would cause deviations from these assumptions would likely cause energy consumption and prices to deviate from our forecast.”

 

Brent crude oil spot prices averaged $68 per barrel (b) in May, up $4/b from April. Brent prices were higher in May as global oil inventories continued to decline, albeit at a slower pace than in the first four months of the year.

“In the coming months, we expect that global oil production will increase to match rising levels of global oil consumption. The rising oil production in the forecast is largely a result of the OPEC+ decision to raise production. We expect rising production will end the persistent global oil inventory draws that have occurred for much of the past year and lead to relatively balanced global oil markets in the second half of 2021 (2H21).

“ We expect Brent prices will remain near current levels in 3Q21, averaging $68/b. However, in 2022, we expect that continuing growth in production from OPEC+ and accelerating growth in U.S. tight oil production—along with other supply growth—will outpace decelerating growth in global oil consumption and contribute to declining oil prices. Based on these factors, we expect Brent to average $60/b in 2022.”

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