EIA cuts Brent price outlook; raises US output forecast

The US Energy Information Administration (EIA) lowered its outlook on Brent crude price for 2018, while raising its forecast on US crude production for this year and 2019, according to EIA’s latest short-term energy outlook.

The agency said it expects Brent spot prices to average about $62.13 per barrel (bbl) in 2018, down 0.4 percent from its previous outlook. The benchmark grade is forecast to average 61.51/bbl in 2019.

West Texas Intermediate (WTI) crude oil prices are likely to average $4/bbl lower than Brent prices in both 2018 and 2019.

The US crude oil production, meanwhile, is now expected to average 10.7 million barrels per day (bpd) in 2018, up 1 percent from last month’s forecast.

“(This) would mark the highest annual average US crude oil production level, surpassing the previous record of 9.6 million bpd set in 1970,” the agency said.

In 2019, the US crude oil production is expected to average 11.27 million bpd.

“EIA estimates that US crude oil production averaged 10.3 million bpd in February, up 230,000 bpd from the January level, when there were some well freeze-offs in the Permian and Bakken,” the report said.

In terms of global inventories, the EIA expects inventories of global petroleum and other liquid fuels to grow by about 0.4 million bpd in 2018 and by another 0.3 million bpd in 2019.