US energy agency revises oil price forecast up for 2022

By Sibel Morrow

ANKARA (AA) - The US Energy Information Administration (EIA) has revised up its 2022 forecast for global crude oil prices amid "heightened levels of uncertainty" resulting from a variety of factors, including Russia’s full-scale invasion of Ukraine.

In the June Short-Term Energy Outlook (STEO), the EIA on Tuesday revised up the price of Brent crude to an average of $107.37 per barrel and American benchmark West Texas Intermediate (WTI) to $102.47 a barrel in 2022. These figures were 103.35 and 98.20, respectively, in last month's report.

In 2023, the agency predicts that Brent will decline to $97.24 per barrel, while WTI is projected to fall to $ 93.24 a barrel.

However, the EIA cautioned that the price forecast is "highly uncertain," driven by a range of factors including how sanctions affect Russia's oil output, the production decisions of OPEC+, and the rate at which US oil and natural gas producers increase drilling.

The agency also pointed to other key uncertainties expected to affect prices, including the impact and pace of sanctions on Russia, potential new sanctions, the pace of petroleum demand growth through the summer, and the potential for demand to decline because of high retail fuel prices.

According to the statistics agency, the ongoing impact of the coordinated release of petroleum supplies from strategic reserves in the US and Europe, geopolitical uncertainties in Libya and Yemen, along with potential new developments on an Iran deal will also be important for oil price formation in the coming months.

The agency forecast that Russia's production of total liquid fuels would decline from 11.3 million barrels per day (bpd) in the first quarter of 2022 to 9.3 million bpd until the end of next year.

Noting that the EU will impose a crude oil import ban in six months and a petroleum product import ban in eight months, the agency said the possibility that these sanctions or other potential future penalties reduce Russia's oil production by more than expected "creates upward risks for crude oil prices during the forecast period."

- US crude oil production increases

The agency forecast that global oil demand would grow by 2.3 million bpd in 2022, reaching 99.6 million bpd and 101.3 million bpd in 2023.

Crude oil output in the US is forecast to average 11.92 million bpd in 2022, up from 11.2 million bpd in 2021.

In 2023, crude oil output in the country is expected to reach 12.97 million bpd.

The agency forecast that OPEC crude oil production will average 28.8 million bpd in 2022, up 2.52 million bpd from 2021, and 29.45 million bpd in 2023.