In its June 2018 update of the Short-Term Energy Outlook (STEO), EIA predicts that crude oil prices will average $71 per barrel in 2018 and $68/b in 2019. The 2019 forecast price is also $2/b higher than in the May STEO.
Crude oil prices have increased greatly as global oil inventories have generally declined from January 2017 through April 2018. Despite the fact that the 2019 oil price forecast is higher than it was in the May STEO, EIA expects oil prices to reduce in the coming months because global oil inventories will rise slightly during the second half of 2018 and in 2019.
EIA also expects global petroleum and other liquids inventories to increase by 210,000 barrels per day (b/d) next year, a factor that will probably decrease oil prices.
The majority of growth in global oil production is expected to come from the US. US crude oil production will average 10.8 million b/d for full-year 2018, up from 9.4 million b/d in 2017, and will average 11.8 million b/d in 2019. If the 2018 and 2019 forecast annual averages do prove right, they will be the highest levels of production on record.
Moreover, OPEC crude oil production will average 32.0 million b/d in 2018, decreasing 0.4 million b/d from the 2017 level. Total OPEC crude oil output will increase slightly in 2019 to an average of 32.1 million b/d, while the 2018 and 2019 levels will be lower than forecast in the May STEO.
The lower OPEC forecast is one of the main reasons why EIA expects oil prices to be slightly higher in 2019 compared with last month’s forecast.
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