The U.S. Energy Information Administration (EIA) forecasted in a report that the global crude oil price will decline to below $100 in 2023, according to The Xinhua News Agency reports.
In its April's Short-Term Energy Outlook, the EIA said Brent crude oil price will average $108 per barrel in the second quarter of 2022, $102 per barrel in the second half of this year and further decline to $93 per barrel in 2023.
"However, this price forecast is highly uncertain", – said the report, citing heightened levels of uncertainty resulting from a variety of factors including the Russia's war against Ukraine.
Actual price outcomes will depend on the degree to which existing sanctions imposed on Russia, any potential future sanctions, and independent corporate actions affect Russia's oil production or the sale of Russia's oil in the global market, said the report.
Furthermore, the degree to which other oil producers respond to current oil prices, as well as the effects macroeconomic developments might have on global oil demand, will be important for oil price formation in the coming months, the report added.
However, the rising consumption going into the summer, falling oil production in Russia, and the risk of supply outages amid low global inventory levels will support crude oil prices in the coming months, the report forecasted, adding that the release of strategic reserves by the United States will limit upward price pressures.
The report expected global oil inventories will build at an average rate of 0.5 mln barrels per day (b/d) from second quarter of 2022 through the end of 2023.
The report also assumed the U.S. economy will grow 3.4% in 2022 and 3.1% in 2023, following a growth of 5.7% in 2021, noting a wide range of potential macroeconomic outcomes could also significantly affect energy markets during the forecast period.
According to the report, the Brent crude oil spot price averaged $117 per barrel in March, a hike of 20-dollar per barrel from February.
A person pumps gas at a gas station in the Brooklyn borough of New York, the United States. Photo by Michael Nagle/Xinhua.
OECD commercial oil inventories were at 2.61 bln barrels at the end of March, up slightly from February, which was the lowest level since April 2014, the report estimated.
The report said 98.3 mln b/d of petroleum and liquid fuels were consumed globally last month, an increase of 2.4 mln b/d from March 2021.
Global consumption of petroleum and liquid fuels will average 99.8 mln b/d for all of 2022, a 2.4 mln b/d increase from 2021, the report said, down by 0.8 mln b/d from last month's forecast as a result of downward revisions to global GDP growth from Oxford Economics.
However, the report expected that global consumption of petroleum and liquid fuels will rise by 1.9 mln b/d in 2023 to average 101.7 mln b/d.
The report also forecasted that Russia's oil production will decline by 1.7 mln b/d from February 2022 to the end of 2023, but global oil production will nonetheless increase as a result of higher production elsewhere, mostly from the United States and the Organization of Petroleum Exporting Countries.
The EIA is a statistical and analytical agency within the U.S. Department of Energy.
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