The US Energy Information Administration (EIA) on Wednesday lowered its projection on the global oil demand growth for 2020 by 210,000 bpd to 8.32 million bpd. EIA also revised down its oil demand growth forecast for next year by 490,000 bpd to 6.53 million bpd. The reduction is a result of a downward adjustment in China’s expected consumption growth from 1.5 million bpd to 1 million bpd in 2021.
According to EIA, global oil demand expanded by 1 million bpd in August, the slowest month-on-month growth since the demand began a recovery after a slump caused by the coronavirus pandemic. Last month, global oil supply growth exceeded demand growth for the first time during the recovery period.
US crude output is expected to average 11.38 million bpd this year, EIA said, raising its estimates by 120,000 bpd from last month. However, US oil output is seen to slip to 11.08 million bpd next year. US oil production is expected to jump to 11.2 million bpd, 400,000 bpd more than August. Production is viewed to decline slightly to just under 11 million bpd in next year’s first half and rise again to an average of 11.08 million bpd in the second half of 2021
EIA also increased its 2020 crude price estimates by about 50 cents/barrel from its previous outlooks published last month. However, its 2021 projections were cut by the same amount. WTI crude futures are predicted to average $38.99/barrel this year and $45.07/barrel in 2021. Meanwhile, Brent prices are projected to average $41.90/barrel and $49.07/barrel in 2020 and 2021, respectively.
