EIA lowers Brent price outlook for 2018; US output to rise

The US Energy Information Administration (EIA) lowered its forecast for crude oil prices for the next year, while increasing its estimates for US crude production, in its short-term energy outlook report released Wednesday.

International benchmark Brent crude is expected to average $56 per barrel (bbl) in 2018 compared to $57/bbl in the previous outlook report. For 2017, the government agency held Brent prices stable at $53/bbl.

West Texas Intermediate (WTI) crude is forecast to be about $2/bbl less than Brent prices in both 2017 and 2018.

US crude oil production is expected to average 9.3 million barrels per day (bpd) in 2017 and 10 million bpd in 2018.   The 2018 forecast exceeds the previous record level of 9.6 million bpd set in 1970, the EIA said.

According to the agency, production by Organization of Petroleum Exporting Countries (OPEC) will average 32.3 million bpd in 2017 and 32.8 million bpd in 2018.

The agency expects the implied global petroleum and liquid fuels inventories to decline by about 0.2 million bpd in 2017 and then increase by an average of 0.1 million bpd in 2018.