Mumbai: The US Energy Information Administration (EIA) has slashed its estimate for crude oil prices due to slowerthan-forecast global economic growth.

In its Short Term Energy Outlook on Wednesday, the US energy agency cut its 2022 price forecast for West Texas Intermediate (WTI) crude oil to USD 95.74 per barrel from USD 98.07 per barrel estimated last month. Brent crude price has been pegged at USD 102.09 per barrel compared with USD 104.21 per bbl in September.

In 2023, the agency sees West Texas Intermediate crude average USD 88.91 per barrel against its previous estimate of USD 90.91 per/bl, and Brent crude oil at USD 94.58 per/bl, ascompared to USD 96.91 a bbl in its September report.

Concerns about recession and fresh lockdowns due to spread of COVID-19 have taken their toll on economic activities in the last few weeks. This has led to concerns about lower crude oil demand. The International Monetary Fund (IMF) has also slashed its estimate for economic growth globally for 2022, and warned about a probable recession.

The US energy agency has also cut its production estimate for the Organization of the Petroleum Exporting Countries (OPEC) to 28.6 million bpd in Oct-Dec and Jan-Mar from an average of 29.6 million bpd in September. The reduction in estimate comes after the cartel and its allies cut production by 2 mln bpd for November. Production of crude oil in the US is expected to average 11.7 million bpd in 2022, slightly lower than the previous forecast of 11.8 mln bpd.

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