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EIA: Oil market uncertainty increased heading into 2022-FORECAST

12 January 2022 10:55 (UTC +04:00)

The US Energy Information Administration (EIA)’s January Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty related to the ongoing COVID-19 pandemic as the Omicron variant raises questions about the global economy and energy consumption, APA-Economics reports citing EIA.

Supply uncertainty in the forecast also stems from uncertainty about OPEC+ production decisions and the rate at which US producers will increase drilling.

“Uncertainty in global oil markets has increased heading into 2022. The way in which the Omicron variant of COVID-19 will affect economic activity and oil consumption this year is still unknown. In late 2021, some restrictions to mitigate the spread of COVID-19 began to return in many regions, notably Europe, even before the Omicron variant surfaced. These restrictions, in combination with increased measures to combat the Omicron variant, raised the possibility that global oil consumption could decline in the coming months and added downward pressure to oil prices,” EIA said.

Based on preliminary data and estimates, global consumption of petroleum and other liquid fuels grew by 5 million b/d in 2021. This growth followed a decline of 8.4 million b/d in 2020. EIA forecasts global oil consumption will grow by 3.6 million b/d in 2022 and by 1.8 million b/d in 2023, reaching 100.5 million b/d in 2022 and 102.3 million b/d in 2023. If realized, the 2022 global liquid fuels consumption level would surpass the pre-pandemic 2019 level and represent a new record for world liquid fuels consumption.