U.S. EIA slashes 2022 global oil demand outlook by 100,000 bpd due to slower U.S. jet fuel recovery

Strong points

U.S. gasoline prices hit six-year high at $ 3.14 / gal in July

Global oil demand to reach pre-pandemic level in 2022

EIA cuts estimate of U.S. oil production by 80,000 bpd for 2022

Rising oil supply from OPEC +, US oil producers and other sources will outpace growth in global oil demand next year, the US Energy Information Administration said in its Aug. 10 report. latest short-term energy outlook.

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The EIA has reduced its estimate of global oil demand growth in 2022 by 100,000 b / d from last month’s outlook, now predicting that demand will increase by 3.6 million b / d from 2021 to 101.3 million bpd in 2022.

This would put global oil demand in 2022 above pre-pandemic levels for the first time, or 350,000 bpd above the 2019 average.

The EIA reduced its 2022 outlook for US jet fuel demand from 80,000 b / d to 1.6 million b / d, reflecting a weaker GDP forecast and a slower-than-expected recovery in air transport .

Due to changes in its supply and demand outlook, the EIA has reduced its estimate for oil prices in 2022 by about 60 cents / bbl. He now sees WTI averaging $ 62.37 / bbl and Brent averaging $ 66.04 / bbl next year.

Gasoline prices in the United States were on average $ 3.14 / gal in July, the highest monthly average since October 2014, according to the EIA. Prices at the pump reflect rising crude prices and rising wholesale margins on gasoline, amid relatively low gasoline inventories, the report said.

IMPACT OF HOME WORK

U.S. job growth and increased mobility led to higher than expected U.S. gasoline demand from May through July, the EIA said. He predicts that this trend will continue into the next year, although the assumption that a “relatively high share” of the workforce will continue to work from home has kept its demand outlook for 2022 below levels. 2019.

It estimates that U.S. gasoline demand will increase to 8.96 million b / d in 2022, up 180,000 b / d from forecast demand in 2021 but 350,000 b / d below. of 2019 levels.

The EIA lowered its 2022 outlook for US oil production from 80,000 b / d to 11.77 million b / d, from an expected average of 11.12 million b / d in 2021. US producers pumped about 11.2 million barrels a day in May, he said.

“We expect production to be relatively stable until October before starting to increase in November and December and throughout 2022,” the report says.

The EIA expects U.S. oil production to exceed 12 million barrels per day by November 2022, but will not hit the most recent high of 12.8 million barrels per day set in March 2020 before the start of the pandemic.

OPEC crude production is expected to average 27.1 million b / d in the third quarter of 2021 and 28.7 million b / d in 2022, up from 25 million b / d in April.


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Felix J. Dixon