The EIA has revised downward again its oil price forecast in October’s Short Term Energy Outlook (STEO), shaving another $5 per barrel off its forecast compared to last month’s STEO.
The reason for the downward adjustment to oil predictions, which it now expects will be fall to $57 per barrel by the second quarter of 2020, is due to the rise of global oil inventories during the first half of 2020.
Brent spot prices averaged $63 per barrel in September.
While the EIA acknowledges the greater risk of oil supply disruptions as of late, it remarks that this risk is more than offset by “increasing uncertainty about economic and oil demand growth in the coming quarters.”
The EIA estimates that crude oil production from OPEC averaged 28.2 million bpd in September, which is down 1.6 million bpd from August. US production was also down for the last month for which there is data: 11.8 million bpd for July, which is 0.3 million bpd down from June production.
The EIA forecasts 29.8 million bpd for the full year 2019 crude oil production, which is down 2.1 million bpd from full year 2018. Full year 2020 OPEC production is expected to be under 2019, at 29.6 million bpd. For the United States, full-year 2019 production is expected to average 12.3 million bpd, which is 1.3 million bpd over 2018. Full-year 2020 production in the United States is expected to increase to 13.2 million bpd, reaffirming global fears that US production increases will more than offset OPEC’s curbs for next year.
Production for both OPEC and the United States averaged 42.9 million bpd in 2018, is expected to average 42.1 million bpd in 2019, and 42.8 million bpd in 2020.
By Julianne Geiger for Oilprice.com
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