EIA Forecasts US$65 Brent in 2020, US$68 in 2021
The U.S. Energy Information Administration (EIA) has released its January Short-Term Energy Outlook, the first to include forecasts for next year. The EIA forecasts Brent crude oil spot prices will average $US65 per barrel in 2020, and US$68 per barrel in 2021. Supply growth in 2020 is expected to be led by non-OPEC producers, particularly the United States, Norway, Brazil, and Canada. The EIA predicts that oil inventories will rise during the first half of this year, contributing to a drop in the average Brent spot price to US$$62 per barrel in H1-2020 despite market concerns about potential supply disruptions. However, oil balances in EIA’s forecast begin to tighten in mid-2020, and in 2021, global oil supply growth slows, driven by the decelerating pace of growth in U.S. tight oil output. Global oil consumption growth is expected to outpace supply growth thereafter, resulting in the forecast rise in average prices in in 2021. The WTI-Brent price differential is expected to average approximately US$5.50 per barrel through 2020 and 2021, compared with an average WTI discount of about US$7.35 in 2019.