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.
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.
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.
