In its March STEO published this week, the EIA said it expects Brent Crude prices to average $117 a barrel in March, $116 for the second quarter of this year, and $102 per barrel in the second half of 2022.
For 2023, the EIA now sees Brent averaging $89 a barrel.
“However, this price forecast is highly uncertain. Actual price outcomes will be dependent on the degree to which existing sanctions imposed on Russia, any potential future sanctions, and independent corporate actions affect Russia’s oil production or the sale of Russia’s oil in the global market,” the EIA noted.
“In addition, the degree to which other oil producers respond to current oil prices, as well as the effects macroeconomic developments might have on global oil demand, will be important for oil price formation in the coming months,” it said.
In the forecast a month ago, the EIA expected Brent to average $82.87 this year and then to slide to an average of $68 a barrel next year.
Also of note in the latest forecast is that the EIA now sees U.S. crude oil production rise in 2023 to a record-high on an annual-average basis of 13.0 million bpd in 2023, up from the 12.6 million bpd expected in its February outlook.
It’s not only the EIA that has significantly raised its oil price forecasts since Russia invaded Ukraine two weeks ago. Many analysts think that $150 and even $200 oil is now not out of the question. Goldman Sachs raised earlier this week its forecast to $135 per barrel in 2022 as the world could face the “largest energy supply shocks ever” with Russian crude struggling to make it to the market. The previous forecast was $98 a barrel.