According to the US Energy Information Administration, US crude production is expected to fall by 160,000 barrels per day to 11.15 million barrels in 2021. Earlier, the EIA predicted a more significant decline in energy production - by 290,000 barrels per day.
The agency also said it expects U.S. petroleum and other liquid fuel consumption to rise 1.41 million barrels per day. According to the EIA, liquid fuel consumption will reach 19.53 million barrels per day this year.
Yesterday, oil prices traded above $69 per barrel for the first time since the end of 2019. Today, the EIA report on energy stockpiles showed near-record levels, thus putting some downward pressure on oil prices. According to data released, crude inventories rose by 21.6 million barrels, the largest one-week increase ever. This growth can be attributed to both stabilization of demand and a decrease in refinery utilization rates under unstable weather conditions. Higher inventory levels tend to affect oil prices, as seen almost immediately after the release of the report. However, oil prices recovered quite quickly and started to grow in anticipation of the Department of Energy's data on energy reserves in the country.
At the time of preparing this material, Brent Crude futures contract for May rose by 0.53% to $67.88, US West Texas Intermediate crude for April advanced by 0.28% to $64.50 per barrel.
The US Department of Energy' report is expected to show crude inventories up by 2.7 million barrels, analysts believe.
The EIA forecasts that global consumption of petroleum and liquid fuels will be 5.3 million barrels per day higher than last year. The department also predicts that oil consumption will increase by another 3.8 million barrels per day in 2022.
Notably, the leaders of the OPEC + member countries had a meeting last week. Market participants expected that a significant recovery in crude prices would force oil producers to speak in favor of increased output. However, the coalition members announced that they would maintain the existing production limits in April, expecting a renewed demand amid the coronavirus crisis. To date, energy production is limited to 7 million barrels per day (at the beginning of the 2020 crisis - more than 9 million barrels). A decline in output on such a scale led to a spike in oil prices. Apart from that, there was a recovery in demand, mainly among the countries of the Asian region.
Since the beginning of this year, oil prices have risen by more than 30% amid a decrease in supply, mainly due to the decision of Saudi Arabia to limit crude production. However, since the beginning of this week, oil prices have still declined (by about 3%), as the market is trying to find a balance following the OPEC+ decision not to increase output since April.
