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EIA revises oil price forecasts up

Oil&Gas Materials 9 May 2018 13:20 (UTC +04:00)

Baku, Azerbaijan, May 9

By Leman Zeynalova – Trend:

Brent spot prices are expected to average $71 per barrel in 2018 and $66 per barrel in 2019, according to May Short-Term Energy Outlook (STEO) of the US Energy Information Administration (EIA).

These forecasts are $7 per barrel and $3 per barrel higher, respectively, than in the April STEO.

EIA expects West Texas Intermediate (WTI) crude oil prices to average $5 per barrel lower than Brent prices in both 2018 and 2019.

April Brent and WTI monthly average spot prices were $6.09 per barrel higher and $3.53 per barrel higher, respectively, than the March average spot prices, according to the EIA estimates.

“At the end of April, crude oil prices reached their highest levels since 2014, following five consecutive quarters of global oil inventory draws. Since January 2017, the beginning of the crude oil production cut agreement among certain countries within and outside the Organization of the Petroleum Exporting Countries (OPEC), global petroleum inventories have declined at an average rate of more than 0.5 million barrels per day (b/d),” said the report.

Excluding Libya, Nigeria, and Equatorial Guinea— countries not subject to the production reductions—OPEC countries produced an estimated 29.3 million barrels b/d in April, the lowest levels since April 2015 and 0.4 million b/d below the agreed-upon production reductions, according to the EIA estimates.

Oil prices may have also risen in anticipation of the potential reinstitution of sanctions on Iran, which could contribute to declines in the country’s crude oil production, EIA experts believe.

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