EIA lowered its Brent spot oil price forecasts for this year and next

According to the U.
S.
Energy Information Administration (EIA) December short-term energy outlook (STEO) report, the agency lowered its average Brent crude spot price forecast
for 2021 and 2022, Rig Zone reported on December 8.

According to its latest STEO show, EIA now expects Brent crude oil spot prices to average $70.
60 per barrel in 2021 and $
70.
05 per barrel in 2022.
Its previously released STEO in November showed that the spot price of Brent crude oil was $71.
59 per barrel in 2021 and $
71.
91 per barrel in 2022.

In its latest STEO, EIA highlighted that the average spot price of Brent crude oil in November was $81 per barrel, down $3 per barrel from October 2021 but up $38 per barrel from November 2020
.

In its December STEO, EIA said crude oil prices have risen over the past year due to a steady decline in global oil inventories, averaging 1.
4 million barrels
per day in the first three quarters of 2021.

Crude oil prices fell sharply on Nov.
26, with the December Brent spot price falling below $
70 a barrel, EIA added.
The drop in oil prices comes after the discovery of the novel coronavirus variant Omicron, which raises the likelihood that oil demand will decline in the
short term.
We expect Brent crude to average $71 per barrel in December and $
73 per barrel in the first quarter of 2022.
For 2022 as a whole, we expect OPEC+, US tight oil and other non-OPEC countries to see production growth outpace the slowdown in global oil consumption, especially given renewed concerns
about the Covid variant.

EIA estimated global oil and liquid fuel consumption at 99.
7 million b/d in November, up 4.
9 million b/d from November 2020 but 1.
1 million b/d
less than in November 2019, EIA estimated in its December STEO.
The agency noted in STEO that it has lowered its forecasts for oil and liquid fuel consumption for the fourth quarter of 2021 and the first quarter of next year, in part due to the recent announcement of travel restrictions
following the reported outbreak of the Omicron variant.

The EIA noted that the potential impact of the spread of this variant is uncertain, which poses downside risks to global oil consumption forecasts, particularly jet fuel
.

We forecast that global oil and liquid fuel consumption for the whole of 2021 will average 96.
9 million barrels per day, 5.
1 million barrels
more than in 2020, EIA added.
We forecast that global oil and liquid fuel consumption will increase by 3.
5 million barrels per day in 2022 to an average of 100.
5 million barrels
per day.

According to EIA's December STEO data, total U.
S.
crude oil production in November was estimated at 11.
7 million barrels
per day.
The agency forecasts that it will rise to an average of 11.
8 million barrels per day in 2022 and reach an average of 12.
1 million barrels
per day in the fourth quarter of next year.

At the time of writing, the price of Brent crude oil is $76.
09 per barrel
.
The price fell from $82.
25 per barrel on Nov.
24 to $72.
72 per barrel on Nov.
26
.