Brent to average $108/bbl in 2H amid growing global uncertainty - EIA

Brent is forecast to average $108/bbl in second half of this year, before falling to $97/bbl next year, the US Energy Information Administration (EIA) said in its latest short-term outlook.

PHOTO: Russian cargo ships docked at St. Petersburg, Russia. Cranes and smoke stacks can be seen in background. Getty Images

The EIA cautions that prices may remain volatile, and the real trend will depend on how the current and potential future sanctions on Russia will affect its production and sales in the global market.

More sanctions could hit Russia’s oil output and create upward pressure on prices, the EIA says.

The agency forecasts Russia’s oil production to decrease from 11.3 million b/d in the first quarter of this year to 9.3 million b/d in the fourth quarter next year. This factors in the EU’s ban on seaborne crude oil imports from Russia within six months.

However, it notes that global production of petroleum and other liquids has recovered to within 1% of its pre-pandemic level.

The EIA forecasts OPEC’s crude oil and liquid fuels output to rise to the highest level since the second quarter of 2019, and to touch 34.6 million b/d later this year.

On 2 June, the bigger OPEC+ group announced to would increase its crude oil ouput target by 648,000 b/d for July and August. But there are doubts that these targets can be met while Russian production is capped by sanctions and avoidance from some buyers.

The EIA revised its global oil demand forecast for this year up by 20,000 b/d to 99.63 million b/d, but trimmed its demand forecast for next year by 230,000 b/d to 101.32 million b/d.

It adds that future macroeconomic factors are likely to affect the accuracy of its most recent forecast, which has factored in global GDP growth of 3.1% in 2022, and 3.4% in 2023.