Forecasts from the US Energy Information Administration (EIA) suggest the price of Brent crude oil will average US$88 per barrel for the first half of this year
The agency estimates that commercial oil inventories in the OECD fell to their lowest levels since mid-2014, which has contributed to current high prices (US$93.91 at the time of writing). Globally, oil prices dipped under US$100 in September 2014 and year-end averages have remained below US$70 since. EIA increased its Brent crude oil price forecast for 2022 by nearly 11% in its February STEO update.
Covid-19 caused production cuts and plummeting prices as demand ceased during lockdowns. But as restrictions ease and demand rises, the price of oil is expected to rise.
“Petroleum production has been slow to catch up with consumption, which has prevented oil prices from moderating,” said EIA acting administrator Steve Nalley.
“Market concerns about oil production disruptions, supply chain vulnerabilities, and uncertainties around how central banks may react to combat inflation all contribute to a highly unpredictable environment for oil and petroleum product prices.”
The agency also expects crude production will rise to an average of 12.0M barrels per day (b/d) in 2022, potentially rising to 12.6M b/d in 2023.
Natural gas spot prices averaged US$4.38 per metric million British thermal units (MMBtu) at the US benchmark Henry Hub in January, a 16% increase from December prices.
Global demand for natural gas also remains strong with US sales to China high and growing. EIA expects US LNG exports to increase 16% over 2021 levels.
Gas production is estimated to be at roughly 96.1 Bcf/d for the year and then rise to an average of 98.0 Bcf/d in 2023 while the price of natural gas will rise to US$4.70 MMBtu on average in February, then fall to around US$3.80 MMBtu for the last three quarters of the year.
Unsurprisingly, associated energy-related CO2 emissions are also set to rise, have already risen more than 6% in 2021 as economic activity increased and contributed to rising energy use. EIA now expects a 2% increase in energy-related CO2 emissions in 2022, primarily from growing transport-related petroleum consumption and petroleum emissions to increase by 4% in 2022.
Sign up now for the Tanker Shipping & Trade Webinar Week 8 March 2022-11 March 2022
© 2023 Riviera Maritime Media Ltd.