EIA Lowered Oil Price Forecasts for 2022 and 2023

SEATTLE (Oil Monster): The U.S. Energy Information Administration (EIA) has lowered its forecasts for Brent crude oil for both 2022 and 2023.

According to the most recently published short term energy outlook (STEO) report, EIA expects the Brent spot price to average at $101.48 per barrel this year and $92.36 per barrel next year. This is significantly lower than the forecasts of $102.13 per barrel and $95.33 per barrel for 2022 and 2023, in its November report.

The STEO noted that Brent crude oil prices averaged $91 per barrel in November, registering marginal decline from the prior month. It must be noted that the spot prices had touched almost $100 per barrel in early-November this year, before ending the month at $86 per barrel.

The market’s concerns over global economic growth, coupled with reduced oil demand from China on the back of Covid-related lockdowns in the country contributed to the dip in prices over the month.

The falling crude oil inventories across the globe will provide support to prices in early-2023 and the second quarter of the year. However, it foresees some downward pressure in oil price in the second half of 2023, primarily due to anticipated rise in oil inventories. Meantime, it will be balanced by supply disruptions and slower-than-projected production growth, EIA noted.

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