Baku, Azerbaijan, Jan.10
By Leman Zeynalova – Trend:
Brent crude oil spot price is expected to average $60 per barrel in 2018 and $61 per barrel in 2019, according to January Short-term Energy Outlook (STEO) released by the US Energy Information Administration (EIA).
This is while it its December STEO, EIA expected Brent spot prices to average $57 per barrel in 2018.
After falling in 2017, EIA expects global oil inventories to rise by 0.2 million barrels per day in 2018 and by 0.3 million barrels per day in 2019. EIA forecasts the expectation of inventory builds in 2018 and 2019 will contribute to crude oil prices declining from current levels to an average of $60 per barrel during the first quarter of 2018. Prices are then expected to remain relatively flat through 2019.
“Brent crude oil averaged $54/barrel (b) in 2017, an increase of $10/b from 2016 levels. Prices increased fairly steadily through the second half of the year, with year-end prices higher than the annual average. Daily Brent spot prices ended 2017 near $67/b, which was the highest level since December 2014. The monthly average spot price of Brent crude oil increased by $2/b in December to $64/b, marking only the fourth time that monthly Brent crude oil prices averaged more than $60/b in the past 36 months,” said the report.
Average West Texas Intermediate (WTI) crude oil prices are forecast to be $4 per barrel lower than Brent prices in 2018 and in 2019, falling from the $6 per barrel average price difference seen in the fourth quarter of 2017, said the EIA.
Daily and monthly average crude oil prices could vary significantly from annual average forecasts, because global economic developments and geopolitical events in the coming months have the potential to push oil prices higher or lower than the current STEO price forecast.
“Uncertainty remains regarding the duration of, and adherence to, the current OPEC production cuts, which could influence prices in either direction. Also, the U.S. tight oil sector continues to be dynamic, and quickly evolving trends in this sector could affect both current crude oil prices and expectations for future prices,” said the report.
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