Washington — Global oil prices will continue to inch up in the coming months, with Brent averaging $50/b by the second half of 2021 as inventories decline, US Secretary of Energy Dan Brouillette said July 28.
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"These developments are setting the stage for what we think will be a very strong economic recovery," Brouillette told a virtual meeting of the Department of Energy advisory board.
The Energy Information Administration forecasts Brent prices will average about $51/b in the third quarter 2021 and $53/b in Q4 2021. It expects WTI prices to average $47/b in Q3 2021 and $49/b in Q4 2021.
Crude prices in 2019 averaged $64.37/b for Brent and $57.02/b for WTI.
The Energy Information Administration will release fresh projections August 11 in its next Short-Term Energy Outlook.
Brouillette also gave new details on Australia's first emergency oil stockpile, which will be held in the US Strategic Petroleum Reserve. He said Australia would buy 1.5 million barrels of US crudes at low prices to store in the Gulf Coast caverns.
The volume is less than 1% of the SPR's current capacity of 714 million barrels.
In April, Australia reached a final deal with the US to create the overseas emergency oil stockpile. Australia said it would spend A$94 million (then $59 million) to buy crude at current low prices and store the supply in the SPR for an initial period of 10 years. The plan had been in the works since 2018.
Brouillette last month signed a memorandum of understanding with Indian oil minister Dharmendra Pradhan to create a similar overseas SPR in the US facility. India has relatively small SPR capacity at home -- 39 million barrels -- considering its ranking as the third-largest oil consumer after China and the US.
When oil prices crashed in March, DOE had hoped to buy up to $3 billion in US crudes to fill the government stockpile. Democrats in Congress blocked the plan, so the agency rented out space to private oil companies as their storage options were tightening.
SPR stocks have grown by 21.2 million barrels from April to 656.1 million barrels as of July 17, according to the latest EIA data. At current capacity, the stockpile has room for another 56.4 million barrels not include the Australian supply.
"We've received millions of barrels of crude oil to the SPR, which helped alleviate the shortage of commercially available storage," Brouillette said.