US EIA cuts 2022 global oil demand outlook by 100,000 bpd as US jet fuel recovery slows

Strong points

U.S. gasoline prices hit their highest level in six years at $3.14/gal in July

Global oil demand will reach its pre-pandemic level in 2022

EIA cuts US oil production estimate by 80,000 bpd for 2022

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

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

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


The EIA cut its 2022 forecast for US jet fuel demand from 80,000 bpd to 1.6 million bpd, reflecting a weaker GDP forecast and a slower-than-expected recovery in air travel.

Following changes to its supply and demand outlook, the EIA cut its 2022 oil price estimate by about 60 cents/bbl. He now sees WTI averaging $62.37/bbl and Brent averaging $66.04/bbl next year.

U.S. gasoline prices averaged $3.14/gal in July, the highest monthly average since October 2014, the EIA said. Pump prices reflect rising crude prices and rising wholesale gasoline margins, amid relatively low gasoline inventories, the report said.

IMPACT OF WORKING FROM HOME

US job growth and increased mobility led to higher-than-expected US gasoline demand from May through July, the EIA said. It sees this trend continuing into 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 2019 levels. .

It estimates U.S. gasoline demand will reach 8.96 million bpd in 2022, up 180,000 bpd from forecast demand for 2021, but 350,000 bpd below forecasts. 2019 levels.

The EIA cut its 2022 U.S. oil production outlook by 80,000 bpd to 11.77 million bpd, from a forecast 2021 average of 11.12 million bpd. U.S. producers pumped about 11.2 million bpd in May, he said.

“We expect production to be relatively stable through October before it begins to increase in November and December and throughout 2022,” the report said.

The EIA expects U.S. oil production to top 12 million b/d by November 2022, but will not reach the latest high of 12.8 million b/d set in March 2020 before the pandemic takes hold.

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, from 25 million b/d in April.



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Felix J. Dixon