Chevron oil rig. Oil production in the United States will increase this year (source: Chevron)
February 15, 2022by Riviera News
Forecasts from the US Energy Information Administration (EIA) suggest that the price of Brent crude oil will average US$88 per barrel in the first half of this year.
The agency estimates that commercial oil stocks in the OECD have fallen to their lowest levels since mid-2014, which has contributed to the current high prices (US$93.91 at the time of writing). Globally, oil prices fell below US$100 in September 2014 and year-end averages have remained below US$70 ever since. The EIA raised its Brent crude oil price forecast for 2022 by almost 11% in its February STEO update.
Covid-19 caused production cuts and a drop in prices as demand ceased during the shutdowns. But as restrictions ease and demand increases, the price of oil is expected to rise.
“Oil production has been slow to catch up with consumption, which has kept oil prices from moderating,” said Steve Nalley, acting EIA administrator.
“Market concerns about oil production disruptions, supply chain vulnerabilities and uncertainties about how central banks might react to fight inflation are all contributing to a highly unpredictable environment for prices. petroleum and petroleum products.
The agency also expects crude production to average 12.0 million barrels per day (bpd) in 2022, rising to 12.6 million bpd in 2023.
Natural gas spot prices averaged US$4.38 per million metric British thermal units (MMBtu) at the US Henry Hub benchmark in January, a 16% increase over December.
Global demand for natural gas also remains strong, with US sales to China high and growing. The EIA expects US LNG exports to increase 16% from 2021 levels.
Gas production is estimated at approximately 96.1 Bcf/d for the year, then increases to an average of 98.0 Bcf/d in 2023 while the price of natural gas increases to US$4.70 MMBtu on average in February, then will fall to around US$ 3.80 MMBtu for the last three quarters of the year.
Unsurprisingly, the energy-related CO associated2 emissions are also expected to increase, have already increased by more than 6% in 2021 as economic activity has increased and contributed to the increase in energy consumption. The EIA now expects a 2% increase in energy-related CO2 oil emissions in 2022, mainly due to growing transport-related oil consumption and oil emissions, which are expected to increase by 4% in 2022.