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Updated May 2022


Figure S1.2 shows historical and forecast prices for West Texas Intermediate (WTI).


The average annual price of WTI in 2021 was US$67.68 per barrel (bbl), an increase of 73 per cent from 2020.

The base-case price for WTI is projected to increase to US$95.00/bbl in 2022, dropping to US$83.00/bbl in 2023 and US$77.00/bbl in 2024. From 2025 onwards, the price is projected to increase to US$88.45 by 2031.

With the assumption of continued lower demand for transportation fuels, the low-price case projects WTI to average US$57.71/bbl in 2022, US$49.92/bbl in 2023, and US$48.76/bbl by 2031.

The high-price case, which considers a rapid economic recovery, higher than anticipated global demand, and constrained supply, resulting in an average price of US$156.38/bbl in 2022, US$137.99/bbl in 2023, and US$160.46/bbl by 2031.

In 2021

U.S. production: The price of WTI crude oil increased throughout 2021 as global demand recovered, and the supply was slow to respond. U.S. oil production fell from the 11.3 million barrels per day (bbl/d) in 2020 to 11.2 bbl/d in 2021. The tight supply conditions resulted from well shut-ins because of the steep drop in drilling activity in 2020, followed by well freeze-offs from extreme cold in February and well shut-ins during Hurricane Ida in 2021.

OPEC+ supply management: In response to growing global demand and increasing oil prices, OPEC increased production by about 1 million bbl/d in 2021. OPEC+ agreed at the end of 2021 to gradually ramp up production in 2022.

Forecast for 2022 to 2031

The WTI price will be affected by demand-side factors, including the global COVID-19 vaccination rates and the ongoing behavioural effects of the pandemic on oil consumption. On the supply side, WTI prices will depend on the duration and adherence to the OPEC+ production targets. The U.S. shale oil production and geopolitical tensions will also affect prices.

The forecast for 2022 assumes that WTI prices will be supported by several key factors including OPEC+'s commitment to modestly increase supply, the gradual expansion in U.S. production, a continued global economic recovery, and geopolitical events in Eastern Europe. However, it is expected that supply will catch up with demand by the end of 2022. In 2023 and 2024, the continued growth of crude oil production due to higher prices and increased investment will slightly exceed demand creating WTI price retreats in 2023 and 2024.

By 2031, in absence of policies that would reduce oil consumption, it is too early to predict a rapid decline in oil demand. The lower need for transport fuels may be offset by growing feedstock requirements in the petrochemical sector, particularly in developing economies.

Balancing global supply and demand: According to the International Energy Agency, the world oil demand pre-pandemic (2019) was about 100 million bbl/d. The agency forecasts that demand could return to that level by 2022. Given the supply and demand imbalance and the lingering uncertainty around economic recovery from the pandemic, the near-term price of WTI is expected to remain volatile.

U.S. oil production: U.S. production is projected to start increasing in 2022 and 2023 as new well activity increases. Most U.S. production gains in recent years have come from shale/tight plays. Since wells producing in shale/tight plays have steep decline curves, significant increases in new drilling are required to maintain production level. U.S. oil production growth could be limited in 2022 but anticipated to grow thereafter when accounting for lead times between investing capital and producing.

Geopolitical tensions: Geopolitical tension remains a key point of uncertainty in the oil market due to conflicts in Eastern Europe.

Low- and High-Price Cases

The low- and high-price cases are estimated using a 90 per cent confidence interval. The following factors affect the WTI price cases:

Low-price case:

  • Demand is reduced due to recurring COVID-19 variants.
  • OPEC+ production exceeds the target output level.
  • U.S. shale production continues to grow throughout the forecast period.

High-price case:

  • Global COVID-19 vaccination rollouts conclude faster than projected.
  • Economic activity rebounds faster than expected, significantly supporting global oil demand in the near term.
  • The price of WTI is bolstered by cuts in global oil production led by OPEC+, effectively reducing inventories.
  • Geopolitical conflicts disrupt the regional oil supply.

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