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The US Energy Information Administration (EIA) has revised its earlier crude oil price forecast, originally issued in April, but now expected to be around $40.52 per barrel, up $6 from its April estimates of only $34.73 per barrel for the average price of crude in 2016.
"Improving economic data, growing supply disruptions, and falling U.S. crude oil production and rig counts contributed to the price increase," the EIA said in its Short-Term Energy Outlook report released today.
The forecast for Brent crude prices in 2017 were also revised upwards, from $40.58 per barrel to $50.65 per barrel.
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The West Texas Intermediate (WTI) prices were also revised positively, with new expectations for 2016 at $40.32 per barrel.
For 2017, the EIA expects to see Brent and WTI at the same price.
Average Brent crude prices in April were $42 per barrel, or $3 higher than in March.
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In other data, the EIA predicted that crude oil production will decline by 830,000 barrels per day in 2016, but by only 410,000 next year. The first part of this forecast is in line with the earlier assessment from the agency, but the 2017 forecast is lower than the previously assessed decline of 560,000 bpd.
"U.S. crude oil production in 2017 is expected to be more than 100,000 barrels per day higher than previously forecast in response to higher oil prices," EIA Administrator Adam Sieminski said in comments released after the data, as carried by Reuters.
By Charles Kennedy of Oilprice.com
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Charles is a writer for Oilprice.com