The US Energy Information Administration downgraded its world petroleum production outlook, following key changes in the expected output of the Organization of the Petroleum Exporting Countries (OPEC).
- The EIA’s latest Short-Term Energy Outlook expects world petroleum production to be average 98.9 million barrels per day in the second half of the year, lower than its earlier forecast of 99.4 million b/d.
- The downward revision comes as OPEC and its partners extended their production agreement, increasing production by 400,000 b/d until previous cuts are reversed by the third quarter of 2022.
- OPEC total production is predicted at 22.0 million b/d in the second half, down by 600,000 b/d from the previous forecast. This will then increase to an average of 34.2 million b/d in 2022, up by 40,000 b/d from the earlier forecast.
- The EIA expects the United Arab Emirates, Kuwait, and Iraq to boost production due to their increased baselines starting May next year. The latest forecast also assumes that sanctions against Iran will remain in place.
Monthly petroleum increases are expected to be capped at 400,000 b/d in 2022 to avoid oversupply and a lower movement in prices.