The U.S. Energy Information Administration (EIA) said in a report on Tuesday that global oil production will increase to match rising levels of global oil consumption in the coming months, leading to relatively balanced global oil markets.
In its June’s Short-Term Energy Outlook (STEO), EIA expected rising oil production will end the persistent global oil inventory draws that have occurred for much of the past year and lead to relatively balanced global oil markets in the second half of 2021. EIA said the rising oil production in the forecast is largely a result of the OPEC+ decision to raise production.
Earlier this month, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed to continue their existing plan to gradually increase oil production through July.According to EIA, Brent prices will remain near current levels in the third quarter this year, averaging 68 U.S. dollars per barrel.
However, in 2022, EIA expected that continuing growth in production from OPEC+ and accelerating growth in U.S. tight oil production, along with other supply growth, will outpace decelerating growth in global oil consumption and contribute to declining oil prices. Based on these factors, EIA expected Brent price to average 60 dollars per barrel in 2022.
As for the United States, its economy continues to rise due to the easing of the COVID-19 pandemic, contributing to energy use. As the prices of West Texas Intermediate crude oil remain above 60 dollars per barrel during 2021 in the current forecast, EIA expected that producers will drill and complete enough wells to raise 2022 production from 2021 levels.EIA forecast that 2022 U.S. oil production will average 11.8 million barrels per day, up from a forecast average of 11.1 million barrels per day in 2021.