Commodities Buzz: EIA Says Global Liquid Fuels Inventories Will Begin Building In 2022

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The EIA noted in a latest update that since the third quarter in 2020, global demand for crude oil and petroleum products has increased faster than production, which has led to inventory draws and increasing crude oil prices. In February 2020, before the World Health Organization declared COVID-19 a pandemic, the spot price for Brent crude oil averaged $56 per barrel (b) and $51/b for West Texas Intermediate (WTI). The spot prices for Brent fell to $18/b and WTI to $17/b in April 2020 because of the significant decline in demand caused by the pandemic. Prices have since increased and are now above pre-pandemic levels because of returning demand and slow global oil production growth. In October, the price of Brent crude oil averaged $84/b, and the price of WTI averaged $81/b, the highest nominal prices since October 2014. EIA forecasts that global liquid fuels inventories will begin building in 2022, driven by rising production from OPEC+ and the United States, which will contribute to falling crude oil prices.

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