The U.S. Energy Information Administration (EIA) revealed on Friday that crude inventories surged by 4.351 million barrels in the week ended January 15. Economists had forecast a drop of 1.167 million barrels.

At the same time, gasoline stocks fell by 0.260 million barrels, while analysts had expected an advance of 2.771 million barrels. Distillate stocks rose by 0.458 million barrels, while analysts had forecast an increase of 1.214 million barrels.

Meanwhile, oil production in the U.S. remained unchanged at 11.000 million barrels a day.

U.S. crude oil imports averaged 6.0 million barrels per day last week, down by 194,000 barrels per day from the previous week.

FXStreet notes that Brent crude oil prices are currently close to $55/bbl, having started the year at $52/bbl. Suvro Sarkar, Industry Analyst at DBS Bank, revises up the average Brent Crude Oil price forecast for 2021 to $55-60/bbl and introduces the 2022 average Brent Crude Oil price forecast of $60-65/bbl. 

“Brent averaged around $43/bbl in 2020. We are likely to see a much better year for oil in 2021, as demand recovers (by around 6mmbbpd by our projections), while supply remains curtailed by OPEC+ production cut agreements (increasing by around 3.0mmbpd by our projections, less than the demand increase). While oil demand is still not expected to recover close to pre-covid levels in 2021; the pace of demand growth is nevertheless expected to outstrip the pace of supply growth in 2021, leading to inventory drawdowns and stronger oil prices overall.”

“With a stronger start to the year in our forecasts now, we thus raise our average 2021 Brent crude oil price forecast to$55-60/bbl. We also introduce 2022 average Brent crude oil forecast of$60-65/bbl on the assumption that air travel recovers closer to normal levels in 2022, OPEC+ discipline stays and US shale growth is contained under the new Biden administration.”