US energy agency revises up oil price forecast for 2023

The US Energy Information Administration (EIA) revised up its 2023 forecast for global Brent crude oil prices on Tuesday, citing production growth in oil-producing countries, especially the US.

In the November Short-Term Energy Outlook (STEO), the EIA revised up the price of Brent crude for 2022 to an average of $102.13 per barrel and the American benchmark West Texas Intermediate (WTI) to $95.88 a barrel in 2022. In the report last month, these figures were $102.09 and $95.74, respectively.

For next year, the agency expects the price of Brent crude to average $95.33 per barrel and WTI to average $89.33 per barrel.

The EIA said that growth in OPEC and non-OPEC oil production, most notably in the US, will keep the Brent crude oil price lower on an annual average basis in 2023 than in 2022.

Despite increasing concerns around weakening global economic conditions, the agency forecast that global oil consumption will outpace global oil production next year, which will contribute to increasing oil prices in the second half of the year.

In addition, weakening global economic conditions, which could limit oil demand growth, pose a downside risk for prices, while higher-than-forecast oil prices could stem from supply disruptions resulting from the EU’s impending bans on the seaborne import of crude oil and petroleum products from Russia.

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– US crude oil production increases

Crude oil output in the US is predicted to average 11.83 million barrels per day (bpd) in 2022, up from 11.25 million bpd in 2021.

In 2023, crude oil output in the country is expected to reach 12.31 million bpd, surpassing the record high level set in 2019 of 12.30 million bpd.

OPEC’s output is estimated to average 34.09 million bpd in 2022 and 34.37 million bpd in 2023.

The agency predicts that non-OPEC liquids production will be 65.84 million bpd in 2022 and 66.30 million bpd next year.

Global crude oil production will average 99.93 million bpd in 2022 and 100.67 million bpd in 2023.

The agency forecasts that global oil demand will be 99.82 million bpd at the end of the year and 100.98 million bpd next year.

Referring to the OPEC decision to reduce its crude oil production target by 2 million barrels per day (bpd) in November, the IEA said the announcement had a limited effect on its global oil production forecast as the group had already predicted it would fail to meet its production targets.

• US Energy