The U.S. Energy Information Administration (EIA) on Tuesday forecast that uncertainties related to the COVID-19 pandemic will remain because the effects on energy markets of mitigation efforts are still evolving.
In its May Short-Term Energy Outlook (STEO), EIA said that reduced economic activity related to the pandemic has caused significant changes in energy supply and demand patterns. Crude oil prices have fallen significantly since the beginning of 2020 and remain at some of their lowest levels in more than 20 years.
According to the organization, Brent crude oil prices will average 34 U.S. dollars per barrel in 2020, down from an average of 64 dollars per barrel in 2019. EIA forecast that Brent prices will rise to an average of 48 dollars per barrel in 2021, 2 dollars per barrel higher than forecast last month.
EIA estimated global petroleum and liquid fuels consumption in the first quarter of 2020 to decline 5.8 million barrels per day (b/d) from the same period in 2019. It also expected global petroleum and liquid fuels demand in 2020 to decrease 8.1 million b/d from last year, before increasing by 7.0 million b/d in 2021.
The organization expected that global liquid fuels inventories will grow by an average of 2.6 million b/d in 2020 after falling by 0.2 million b/d in 2019. The inventory builds will be largest in the first half of 2020 as a result of widespread travel limitations and sharp reductions in economic activity. Firmer demand growth as the global economy begins to recover will contribute to global oil inventory draws beginning in the third quarter of 2020. Enditem