The European Union’s Executive Commission has raised its forecast considereably. As noted in the Commission’s quarterly review, the price of North Sea Brent will stand at about $71.60 a barrel, compared to its spring forecast of $63.90. Its assessment for next year has adjusted the oil price upward to $78.90 from $61.60. And in 2023, the Commission expects a price of $72.30.
The U.S. Department of Energy anticipates that by the end of the year, the price of Brent will remain at the high level of $82 a barrel. The U.S. Energy Information Administration (EIA) notes that oil prices rose over the past year as a result of stable reductions in world oil stocks, which stood, on average, at 1.9 million barrels per day over the course of the first three quarters of 2021. It also noted the considerable influence on the market of the most recent decisions taken by the OPEC+ group to maintain its plan on raising oil production.
“We expect Brent prices will remain near current levels for the rest of 2021, averaging $82 a barrel in the fourth quarter of 2021. In 2022, we expect that growth in production from OPEC+, U.S. 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 a barrel,” the EIA wrote in its latest Short-Term Energy Outlook.
The Russian central bank in November also raised its forecast for the price of Russian Urals crude, whose trading quotes are linked to the cost of Brent. The bank forecast that in 2021, Urals will stand at $70 a barrel compared its earlier forecast of $65. For 2022, it put the price of Urals at $65 a barrel — $5 higher than its previous forecast.
