U.S. EIA lowered its oil price forecast

The EIA lowered its forecast
for the average spot price of Brent crude oil in 2021 and 2022, according to the U.
S.
Energy Information Administration's (EIA) Short-Term Energy Outlook (STEO) report for December.

According to its latest STEO, EIA now expects the spot price of Brent crude oil to average $70.
60 per barrel in 2021 and $
70.
05 per barrel in 2022.
Its previously released STEO in November showed that the spot price of Brent crude was $71.
59 per barrel in 2021 and $
71.
91 per barrel in 2022.

In its latest STEO, EIA highlighted that the average spot price of Brent crude oil in November was $81 per barrel, down $3 per barrel from October 2021 but up $
38 per barrel from November 2020.

"Crude oil prices have risen
over the past year as global oil inventories averaged 1.
4 million barrels per day in the first three quarters of 2021," EIA said in its December STEO.
The EIA added, "Crude oil prices fell sharply on November 26, and the Brent spot price began to fall below $
70 per barrel in December.
" The price drop comes after the discovery of a new Covid-19Omicron variant, which increases the likelihood of
a decline in oil demand in the short term.
"We expect Brent crude oil to average $71 per barrel in December and $73 per barrel in the first quarter of 2022
.
For 2022 as a whole, we expect OPEC+, US tight oil and other non-OPEC countries to see production growth outpace the slowdown in global oil consumption, especially given renewed concerns
about the Covid-19 variant.
”

In the December STEO, EIA estimated that the world consumed 99.
7 million barrels per day of oil and liquid fuels in November, 4.
9 million barrels per day more than in November 2020 but 1.
1 million barrels per day less than in November 2019.
The organization noted in STEO that it has lowered its forecasts for oil and liquid fuel consumption for the fourth quarter of 2021 and the first quarter of next year, in part due to the recent announcement of travel restrictions
following the reported outbreak of the Omicron variant.

"The potential impact of the spread of this variant is uncertain, which poses downside risks to global oil consumption forecasts, particularly jet fuel
," the EIA noted.
"We forecast an average global consumption of oil and liquid fuels of 96.
9 million barrels per day for all of 2021, an increase of 5.
1 million barrels
per day from 2020.
" We forecast an increase of 3.
5 million barrels per day in global oil and liquid fuel consumption, averaging 100.
5 million barrels
per day by 2022.

According to EIA's December STEO, total U.
S.
crude oil production in November is estimated at 11.
7 million b/d
.
The organization predicts that this will rise to an average of 11.
8 million barrels per day in 2022 and reach an average of 12.
1 million barrels
per day in the fourth quarter of next year.