Oil Price: EIA predicts that demand will exceed supply in the first quarter, 2021

 

brent crude price

The EIA, the US Energy Information Administration, in a report released today says that the oil demand in the first quarter of 2021 will be higher than that of the supply, citing the production cuts initiated by the OPEC+ and the decline in US crude oil production.

The reports clearly states that the production cut by the Saudis for February and March by 1 million barrels a day will be a significant factor for the latest development.

The estimated total oil production by the OPEC+ for 2021, however, is going to be higher than the expected figure, according to the EIA – from 25.6 million in bpd in 2020 to 27.2 million bpd.

The total US crude oil production, according to the EIA, is just going to be 11.2 million bpd for 2021 – less than that of 2020.

eia forecast


The EIA does not ignore the impact of the Coronavirus on the demand of oil. It says the demand will suffer for at least the next two quarters.

eia-2


While taking into account these factors, the EIA predicts that the price of Brent crude oil will revolve around a range from $51 to $55 per barrel in the first quarter of 2021.


 

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