Gasoline and Diesel Prices Monitor
Crude Oil and Liquid Fuels
U.S. economic activity continues to rise after reaching multiyear lows in the second quarter of 2020. The increase in economic activity and easing of the COVID–19 pandemic have contributed to rising energy use. U.S. gross domestic product (GDP) declined by 3.5% in 2020 from 2019 levels.
The Energy Information Administration (EIA) assumes U.S. GDP will grow by 7.4% in 2021 and by 5.0% in 2022. Brent crude oil spot prices averaged $73 per barrel in June, up $5 per barrel from May and $33 per barrel higher than in June of last year. In the coming months, EIA expects that global oil production, largely from OPEC+ members (OPEC and partner nonmember countries), will increase by more than global oil consumption. EIA expects rising production will reduce the persistent global oil inventory draws that have occurred for much of the past year and keep prices similar to current levels, averaging $72 per barrel during the second half of 2021. However, in 2022, EIA expects that continuing growth in production from OPEC+ and accelerating growth in U.S. tight oil production, along with other supply growth, will outpace growth in global oil consumption and contribute to declining oil prices. Based on these factors, EIA expects Brent to average $67 per barrel in 2022.
Based on EIA's estimates, global liquid fuels inventories rose by 7.3 million barrels per day in the first half of 2020 before declining at an average rate of 2.1 million barrels per day in the second half of 2020 and the first half of 2021. EIA forecasts global inventories will continue to fall in the near term but at a slower rate, with global inventories falling by 0.2 million barrels per day in the second half of 2021. EIA then expects inventories to rise by almost 0.5 million barrels per day in 2022.
North Sea Brent crude oil spot prices are expected to average $69 per barrel in 2021 and $67 per barrel in 2022.
WTI crude oil spot prices are expected to average $66 per barrel in 2021 and $63 per barrel in 2022.