Global Oil Benchmark Brent Seen At $82 Per Barrel For Rest Of 2021 - US EIA

WASHINGTON (UrduPoint News / Sputnik - 10th November, 2021) The global price of oil, as determined by the London-traded crude benchmark Brent, is expected to be around $82 per barrel for the rest of the year due to the greater demand for energy versus supply, the US Energy Information Administration said on Tuesday.

"We expect Brent prices will remain near current levels for the rest of 2021, averaging $82/barrel in the fourth quarter of 2021," the EIA said in the November edition of its Short-Term Energy Outlook (STEO) report.

In a separate document accompanying the so-called STEO report, the agency noted that "demand has grown faster than supply, reducing inventories and contributing to higher prices for crude oil and petroleum products".

Brent has rallied 63% this year, hovering at slightly below $85 per barrel on Tuesday, largely on production restraint shown by the 13-member Saudi-led Organization of the Petroleum Exporting Countries and their 10 allies steered by Russia. The combined group, known as OPEC+, is withholding about 6 million barrels per day of regular supply from the market as part of production cuts introduced during the height of the demand decimation in oil seen during the COVID-19 crisis.

While a lot more oil is needed now with the pace of the global recovery from the pandemic, OPEC+ is only adding 400,000 barrels daily to world supply, resulting in the price surge.

The EIA did not miss OPEC+'s influence in its analysis of Brent pricing. "In addition to sustained inventory draws, prices increased after OPEC+ announced in early October�and reaffirmed on November 4�that the group would keep current production targets unchanged," the agency said.

The EIA noted that Brent averaged $84 per barrel in October, up $9 from September and $43 higher from October 2020. "Crude oil prices have risen over the past year as a result of steady draws on global oil inventories, which averaged 1.9 million barrels per day during the first three quarters of 2021," it added.

Still, the agency predicted a $10 drop per barrel for Brent for all of next year.

"In 2022, we expect that growth in production from OPEC+, US tight oil, and other non-OPEC countries will outpace slowing growth in global oil consumption and contribute to Brent prices declining from current levels to an annual average of $72," the EIA said.

The rally in global oil prices has also led to a sharp uptick in US gasoline prices, which EIA forecast in its November STEO will rise 1.2% this month to $3.32 per gallon. Gasoline prices have rallied almost 70% this year.

President Joe Biden has signaled that he might release oil from strategic US reserves to counter the inflationary trend in gasoline.