The U.S. Energy Information Administration (EIA) on Tuesday forecast that uncertainties related to the COVID-19 pandemic will remain because mitigation and reopening efforts continue to evolve.
In its August Short-Term Energy Outlook (STEO), EIA said that reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply patterns in 2020. Uncertainties persist across the outlook for all energy sources, including liquid fuels, natural gas, electricity, coal, and renewables.
For the crude oil prices, EIA expected that Brent crude oil prices will average 43 U.S. dollars per barrel during the second half of 2020 and rise to an average of 50 dollars per barrel in 2021. EIA expected high inventory levels and surplus crude oil production capacity will limit upward price pressures in the coming months. But as inventories decline into 2021, those upward price pressures will increase, said the STEO.
EIA estimated global liquid fuels inventories rose at a rate of 6.4 million barrels per day (b/d) in the first half of 2020 and expected they will decline at a rate of 4.2 million b/d in the second half of 2020 and then decline by 0.8 million b/d in 2021.
The organization estimated that demand for global petroleum and liquid fuels averaged 93.4 million b/d in July. Demand was down 9.1 million b/d from July 2019, but it was up from an average of 85.0 million b/d during the second quarter of 2020.
According to its forecast, consumption of petroleum and liquid fuels globally will average 93.1 million b/d for all of 2020, down 8.1 million b/d from 2019, before increasing by 7.0 million b/d in 2021.
EIA estimated that global liquid fuels production averaged 91.8 million b/d in the second quarter of 2020, down 8.6 million b/d year over year. The decline reflects voluntary production cuts by the Organization of the Petroleum Exporting Countries and partner countries, and reductions in drilling activity and production curtailments in the United States because of low oil prices. – Xinhua