Washington — The US Energy Information Administration boosted its outlook for crude futures by about $4/b in the second half of 2020 and by $2/b for 2021 on OPEC+ supply cuts and rising demand after many regions lift coronavirus pandemic-related lockdowns.
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EIA now sees Brent prices averaging $40.50/b in 2020 and $49.70/b in 2021, compared with the 2019 average of $64.37/b, the agency said July 7 in its monthly Short-Term Energy Outlook.
It expects WTI prices to average $37.55/b in 2020 and $45.70/b in 2021, down from $57.02/b in 2019.
EIA raised its outlook for US oil production slightly. It now expects output to average 11.63 million b/d in 2020, up 70,000 b/d from June's forecast, and 11.01 million b/d in 2021, up 170,000 b/d from last month.
US oil production is expected to bottom out at 10.907 million b/d in July 2021.
EIA trimmed its outlook for the 2020 global oil demand contraction to 8.15 million b/d, from 8.34 million b/d projected last month.
It now expects global oil demand to average 92.89 million b/d in 2020 and 99.88 million b/d in 2021. Global demand averaged 101.04 million b/d in 2019.
EIA estimates that global oil demand increased 10 million b/d in June compared with April levels as economies started emerging from lockdowns.
Global supply dropped by 12 million b/d in the same period as a result of OPEC+ alliance production cuts and price-driven shut-ins and curtailments in the US and Canada.
"The situation in oil markets has now shifted," the agency said.
EIA expects global oil inventories to generally decline through the end of 2021 as demand continues to recover.
"These inventory draws will likely put upward pressure on oil prices, but that pressure will be partly offset by high existing oil inventories, particularly in the second half of 2020, and a large amount of spare crude oil production capacity," it said in the monthly report.
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