Baku, Azerbaijan, Nov.7
By Leman Zeynalova – Trend:
Brent spot prices are expected to average $72 per barrel in 2019, according to the US Energy Information Administration (EIA).
“EIA expects Brent spot prices will average $72 in 2019 and that West Texas Intermediate (WTI) crude oil prices will average about $7/b lower than Brent prices next year,” said the November Short-Term Energy Outlook (STEO) released by EIA.
This is while in October STEO, EIA forecasted Brent prices to stand at $75 per barrel in 2019 and WTI prices to be $6 per barrel lower than Brent prices.
As for the current situation, EIA estimates that Brent crude oil spot prices averaged $81 per barrel in October, up $2 per barrel from September.
“Despite the increase in monthly average prices, Brent spot prices declined from $85 per barrel on October 1 to $75 per barrel on October 31. Crude oil prices declined from the end of September to the end of October at a faster percentage rate than in any month since July 2016. Prices approached four-year highs in early October given the uncertainty about the amount of Iranian crude oil supply coming off the market and whether or not other producers could make up for the shortfall,” said the report.
However, increased indications of a global economic slowdown, as well as higher than expected global petroleum supply, contributed to rapid price declines later in the month, according to EIA.
EIA analysts point out that similar to early 2018, financial markets exhibited significant price volatility in October, contributing to selloffs in risk assets such as equities and commodities.
“Chinese economic growth was lower than expectations, and leading economic indicators for several countries have slowed, leading to market concerns over the pace of oil demand growth in the coming months. Continued depreciation in emerging market countries’ currencies—which makes the cost of crude oil imports more expensive—have also put downward pressure on the petroleum demand outlook. EIA is forecasting global petroleum and other liquid fuels consumption growth to average 1.4 million barrels per day in 2019, which is 0.1 million barrels per day lower than forecast in the October STEO.”
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