Changes in both global production and consumption of liquid fuels have shifted our forecast of a balance between the two for the remainder of 2022 and 2023. For most of 2021, more liquid fuels were consumed in the world than products. From the second quarter of 2022, global production of liquid fuels exceeded consumption. According to our August Short term energy outlook, we expect that in 2023, global supply and demand will be very close. We forecast average production of 101.3 million barrels per day (bpd) in 2023 and average consumption of 101.5 million bpd.
When consumption of liquid fuels exceeds production, prices generally increase. When production exceeds consumption, prices generally fall. Due to changes in supply and demand in mid-2022, we expect the price of Brent crude oil to average $105/bbl (bbl) in 2022 and $95/bbl in 2023. Crude oil price directly affects the price of petroleum products.
On the supply side, Russia produced more oil and other liquid fuels between May and July 2022 than expected, despite sanctions and independent corporate actions.
Additional sanctions against Russia, effective in December 2022 and February 2023, have already been announced. We predict that the bulk of Russian crude oil and about half of its petroleum products that will be subject to EU sanctions will likely be sold in other markets. The sanctions will come into effect between December 2022 and February 2023. We expect Russian production to decline by 1.6 million bpd between the start of the fourth quarter of 2022 and the end of the first quarter of 2023.
We forecast increased production in other parts of the world by the end of 2023 to push global oil and liquid fuels production to an average of 100.1 million b/d in 2022 and 101, 3 million b/d in 2023.
We expect U.S. crude oil production to average 11.9 million b/d in 2022 and hit a record 12.7 million b/d in 2023. Future OPEC production decisions will also affect the global offer. We expect OPEC to set higher production targets in 2022 and 2023, but some OPEC member countries may not be able to meet higher production targets.
On the consumer side, consumer confidence has declined as inflation remains high and borrowing costs have increased due to rising interest rates.
The University of Michigan Consumer Sentiment Survey hit its lowest level on record in June, with data dating back to November 1952. The survey showed that consumer sentiment began to rise from its June trough in July and August. Eurozone consumer confidence hit historic lows in July.
Despite these factors suggesting downward pressure on oil and liquid fuel consumption, we expect global consumption to grow year-over-year in 2022 and 2023. In 2021, global oil and liquid fuel consumption liquid fuels averaged 97.4 million bpd. We expect it to average 99.4 million bpd for 2022 and average 101.5 million bpd for 2023.
Main contributor: Kimberly Peterson