By Barani Krishnan

Investing.com – On Tuesday oil prices jumped 4% as long-term investors bet on a supply shortage from expected demand. Even though U.S. Energy Information Administration’s weekly stock data may show a slight increase in fuel inventories,

The EIA released on Tuesday their Short-Term Energy Outlook (January) where they bumped up $4 per barrel its crude oil price estimate for 2022.

The oil rally was aided by this, with the U.S. benchmark crude oil price rising $3.99 or 3.8% to $81.22 per baril WTI hit $81.58, the highest price since November’s peak at above $85.

The London-traded Brent, which is the international benchmark for oil, closed up 2.85 percent, or 3.5% at $83.72 per bar. The session saw Brent reach an all-time high of $83.93 for the second month.

The Brent oil price is forecast to reach $75 per barrel in 2015, an increase of $4 over its average for 2021, according to the STEO report by EIA.

WTI was expected to climb from last year’s average of $68.21 to $71.32 this year, the EIA said.

The premier agency for America’s energy data also forecast that US oil production was expected to reach a record average of 12.4 million barrels daily by next year as output catches up with  the slowdown caused by the coronavirus pandemic. 

In March 2020, the US’s highest crude oil production was 13.1 Million barrels. This occurred just prior to the spread of the coronavirus pandemic, which decimated fuel demand.

The EIA said the monthly STEO monthly continues to reflect “heightened levels of uncertainty” due to the ongoing pandemic and emerging coronavirus variants such as the latest publicized strain, the Omicron. “In addition to macroeconomic uncertainties, uncertainty about winter weather and consumer energy demand also present a wide range of potential outcomes for energy consumption,” the agency added.

The EIA forecasted that U.S. crude oil output would rise 2.5 million to 28.8million barrels per day this year, and 28.9million in 2023.

Longs in the crude trade, however, brushed aside the higher production forecasts and focused instead on the EIA’s bullish price forecasts.

“Oil prices seem poised to trade between $80 and $100 a barrel as the global demand outlook still looks upbeat as most major economies are getting closer to the other side of the Omicron fence,” said Ed Moya, analyst at online trading platform OANDA.

Tuesday’s gains in oil came ahead of a snapshot of a weekly snapshot on U.S. crude, gasoline and distillate stockpiles due from the American Petroleum Institute.

API numbers are published each Tuesday at 4:30 PM ET (22:30 GMT) and serve as an indicator of official weekly inventory data, which is due Wednesdays from the EIA. 

Analysts tracked by Investing.com have forecast that U.S. fell by 1.904 million barrels for the week ended Jan. 7, adding to the previous week’s decline of 2.144 million.  

inventories likely rose by 2.408 million barrels, on top of the previous week’s 10.128 million, which was the highest in 21 months.

Stockpiles of , which include diesel and , are expected to have grown by 1.757 million barrels, after the previous week’s gain of 4.418 million.