The Energy Information Administration (EIA) raised its global oil price forecast for 2022. It said Brent will cost an average of $82.87 per barrel, 10.6% higher than the January forecast. WTI, on the other hand, will cost $79.35 per barrel, up 11.2% from the previous forecast.
The EIA's monthly energy short-term outlook says volumes have been revised to 11.97 million barrels a day, from an earlier forecast of 11.8 million barrels a day. Forecasts for WTI and Brent for 2023 were also raised by 1.5% each, to $64.48 for WTI and $68.48 for Brent. As for oil production in 2023, the EIA said it could rise more than the government expected as soaring prices encourage producers to increase drilling. Accordingly, deliveries will average 12.6 million bpd in 2023, higher than the previous estimate of 12.41 million barrels. That is very favourable to US President Joe Biden, who recently asked suppliers to boost output in order to bring down energy prices that are fueling the highest inflation in decades.
After oil prices rose to their highest level since 2014, two of the largest US oil companies said they would increase production. Citigroup also said prices appear to have reached levels that are too tempting for shale industry executives to ignore.