EIA raises oil price forecasts for 2016, 2017

The U.S. Energy Information Administration raised its price forecasts for Brent and West Texas Intermediate crude oil for 2016 and 2017 in its monthly energy outlook report.

The agency forecast Brent crude at $43.46 per barrel (bbl) this year and $51.66/bbl in 2017, up 0.4 percent and 1.5 percent, respectively from the November forecasts.

WTI prices are projected at $43.07/bbl for this year and $50.66/bbl for next year, up 0.6 percent and 1.5 percent, respectively, from the previous forecasts.

“The values of futures and options contracts indicate significant uncertainty in the price outlook,” the agency said.

“The NYMEX contract values for March 2017 delivery traded during the five-day period ending December 1 suggest that a range from $34/bbl to $71/bbl encompasses the market expectation of WTI prices in March 2017 at the 95 percent confidence level,” it added.

The EIA also raised its estimates on U.S. crude production to 8.9 million barrels per day (bpd) for this year and 8.8 million bpd for 2017.

Global oil inventory builds are forecast to average 0.7 million bpd in 2016 and 0.4 million bpd in 2017.

Brent crude is trading down by 0.7 percent at $53.58/bbl and WTI crude is lower by 0.8 percent at $50.55/bbl.