Global oil consumption outpaced oil production for the six consecutive quarters ending with the fourth quarter of 2021 (4Q21), which has led to persistent withdrawals from global oil inventories and significant increases in crude oil prices.

Crude oil production remained restrained as a result of curtailments by OPEC+ members, investment restraint from US oil producers, and other supply disruptions. In 1Q22, however, the US Energy Information Administration (EIA) forecasts that global oil markets will be balanced and that rising production will contribute to inventory builds in 2Q22 and continuing through 2023. r

While the inventory draws from 3Q20 to 4Q21 put upward pressure on crude oil prices, the forecast inventory builds from 2Q22 to 4Q23, conversely, will put downward pressure on crude oil prices, the EIA said.

The price of Brent crude oil averaged $71 per barrel (b) in 2021; EIA forecasts that the price will fall from the current price of around $80/b to average $75/b in 2022 and $68/b in 2023.