According to EIA, brent crude oil averaged $72 per barrel (b) in 2018, and West Texas Intermediate (WTI) averaged $65/b in 2018. The prices for both crude oils finished the year lower than they began it.
Brent and WTI each peaked during October 3 at $86/b and $76/b, respectively. Prices for each benchmark reduced quickly after that, and on December 24, Brent reached an annual low of $50/b and WTI reached an annual low of $43/b.
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Brent ended the year at $54/b, $13/b lower than it began the year, and WTI ended the year at $45/b, $15/b lower than it began the year. This year is the first time since 2015 that crude oil prices for these benchmarks ended the year at a lower price than at the beginning of the year.
As for the US crude oil and other liquids production, they increased in 2018. EIA expects it to average 17.8 million barrels per day (b/d) for the year, the highest level on record and an increase of 2.2 million b/d from the 2017 production level. The US surpassed Russia and Saudi Arabia earlier in 2018 and became the largest crude oil producer in the world.
Moreover, US crude oil production reached record levels in 2018, and in the December Short-Term Energy Outlook, EIA forecasted that 2018 annual crude oil production would reach 10.9 million b/d, surpassing the previous annual high of 9.6 million b/d set in 1970.
US crude oil exports averaged 1.9 million b/d in 2018, about twice the amount that was exported in 2017. Crude oil surpassed distillate as the largest US petroleum export.
The growth in US exports of crude oil and petroleum products caused a one-week period in late November when the US was a net exporter for the first time in EIA’s data history.
International highlights
- EIA expects that OPEC total crude oil and other liquids production will average 39.2 million b/d in 2018, down slightly from 39.3 million b/d in 2017;
- Despite the fact that the US sanctions on Iran started on November 5, 2018, the US granted waivers for some of Iran’s largest customers to continue importing limited volumes of crude oil for six months;
- Crude oil production rises in Saudi Arabia in the second half of 2018 partially offset Iran’s declining production due to the US sanctions on OPEC’s total production levels;
- Russian crude oil and other liquids production rose from an estimated 11.2 million b/d in January to a forecasted 11.6 million b/d in December;
- In order to limit excess supply, on December 7, 2018, OPEC and other producing countries announced they would limit production by 1.2 million barrels per day (b/d) from October 2018 levels during the first six months of 2019.
