The U.S. Energy Information Administration (EIA) and Standard Chartered both increased their oil price forecasts for 2021 this week.
According to its March Short Term Energy Outlook (STEO), the EIA now sees Brent spot prices averaging $60.67 per barrel and WTI spot prices averaging $57.24 per barrel this year. In its February STEO, the EIA projected that Brent spot prices would average $53.20 per barrel and WTI spot prices would average $50.21 per barrel in 2021. Standard Chartered outlined that it had increased its 2021 average Brent and WTI oil price forecasts by $14 per barrel to $65 per barrel and $63 per barrel, respectively, in a report sent to Rigzone.
Looking at next year, the EIA expects Brent spot prices to average $58.51 and WTI spot prices to average $54.75 per barrel in 2022. Brent spot prices were previously expected to average $55.19 per barrel in and WTI spot prices were expected to average $51.56 per barrel in 2022. Standard Chartered left its 2022 average Brent and WTI forecasts unchanged at $59 per barrel and 56 per barrel, respectively.
“The OPEC+ extension of existing supply cuts through April added significantly to near term upward oil price pressures,” the EIA noted in its March STEO.
“EIA continues to expect downward crude oil price pressures will emerge in the coming months as the oil market becomes more balanced … EIA’s forecast of declining crude oil prices and a more balanced oil market reflect global oil supply surpassing oil demand during the second half of 2021,” the EIA added in its latest STEO.
The EIA stated that its March STEO remains subject to heightened levels of uncertainty because responses to Covid-19 continue to evolve. “Reduced economic activity related to the Covid-19 pandemic has caused changes in energy demand and supply during the past year and will continue to affect these patterns in the future,” the EIA said.
At the time of writing, the price of Brent crude oil stood at $68.62 per barrel and WTI stood at $65.19 per barrel.