(S&P Global Platts) The US Energy Information Administration revised its crude price forecast higher in its monthly Short-Term Energy Outlook released March 9 amid tightened first quarter supply outlooks.
The EIA now expects Brent crude prices to average $60.67/b in 2021, up $7.47/b from its February forecast, and $58.51/b in 2022. EIA expects the WTI spot price to average $57.24/b in 2021, up $7.03/b from February, and at $54.75/b in 2022.
The upward revision stems from tightened supply outlooks during the first half of the year after the OEPC+ group March 4 unexpectedly extended the bulk of their output cuts through April.
Crude prices are expected to come under pressure in the second half of the year as increased supply comes online to balance markets. Global crude inventories are expected to decline 1.2 million b/d in the first half of 2021, EIA said, but then grow 400,000 b/d during the second half of the year.
The EIA expects the OPEC+ quota extension to push Brent prices to around $65-70/b during March and April, up more than $10/b from its previous month forecast but expects prices will fall back to around $58/b for the back half of the year as rising supply slows global inventory draws.