US EIA trims 2021 global oil demand growth by 360,000 b/d to 5.9 million b/d

The US Energy Information Administration on Nov. 10 cut its outlook for 2021 global oil demand growth by 360,000 b/d from last month's forecast to 5.9 million b/d on uncertainty surrounding the pandemic response.

EIA now expects global oil demand to average 92.9 million in 2020, plunging from 101.5 million b/d in 2019, as a result of the coronavirus pandemic. EIA forecasts global oil demand at 98.8 million b/d in 2021.

The outlook comes a day after US pharmaceutical maker Pfizer announced promising results in a coronavirus vaccine study. Widespread distribution of an effective vaccine would lead to a surge in global oil demand as economies and borders open back up.

EIA also cut its outlook for US gasoline demand by 300,000 b/d for Q4 2020 and by 200,000 b/d for the first half of 2021.

EIA slightly trimmed its outlook for US crude production from last month, predicting 2020 output will average 11.39 million b/d in 2020 and fall to 11.1 million b/d in 2021.

While US oil production has rebounded from spring shut-ins, drillers' massive capital spending cuts mean any new drilling activity will not be able to offset declines from existing wells.

EIA expects global oil inventories to keep falling in the coming months, which will bring higher prices next year as demand starts to rise.

WTI crude prices are expected to average $38.24/b in 2020 and $44.24/b in 2021, both up slightly from last month's forecast.

EIA expects Brent crude prices to average $40.61/b in 2020, up slightly from last month, and $46.59/b in 2021, down slightly from last month.