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Global Oil Prices to Average $70 per Barrel in 2022, US Energy Agency EIA Says

© REUTERS / Angus MordantThe sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019.
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. - Sputnik International, 1920, 07.12.2021
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WASHINGTON (Sputnik) - Global oil prices are expected to average $70 a barrel next year, some $5 below current levels, on higher output from OPEC+ and other production sources and lower consumption from demand weakened by coronavirus variants, the Energy Information Administration (EIA) said Tuesday.
"For 2022 as a whole, we expect that growth in production from OPEC+, of US tight oil, and from other non-OPEC countries will outpace slowing growth in global oil consumption, especially in light of renewed concerns about COVID-19 variants,” the EIA said in its monthly Short-Term Energy Outlook (STEO). “We expect Brent prices will remain near current levels in 2022, averaging $70/b."
Brent, the global benchmark for crude oil, hovered at above $75 per barrel on Tuesday. It traded as high as $86.70 in October, then tumbled almost 25% to below $66 on fears related to the COVID-19 variant Omicron before rebounding.
A drilling rig operates in the Permian Basin oil and natural gas production area in Lea County, New Mexico, U.S., February 10, 2019.  - Sputnik International, 1920, 26.11.2021
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The EIA also lowered its forecast for US oil prices, pegging the West Texas Intermediate (WTI) benchmark for that at an average of $66.42 for 2022, down 2.7% from what it cited in STEO’s November edition. WTI hovered at above $72 per barrel on Tuesday.
While the EIA dropped its forecasts for Brent and WTI in the coming year, it acknowledged that uncertainty in supply from OPEC + could always change its predictions.
OPEC+ groups the 13-member Saudi-led Organization of the Petroleum Exporting Countries with 10 other producers steered by Russia.
“In addition to uncertainty about macroeconomic conditions, winter weather along with the evolving effects of consumer behavior on energy demand because of the pandemic present a wide range of potential outcomes for energy consumption,” the EIA said. “Supply uncertainty in the forecast results from the production decisions of OPEC+ and with the rate at which US oil and natural gas producers increase drilling.”
The EIA forecast that global consumption of petroleum and liquid fuels will average 96.9 million barrels per day for all of 2021, which would be a 5.1 million increase from 2020. It expects consumption to increase by 3.5 million barrels daily in 2022 to average 100.5 million barrels per day.
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