EIA raises 2019 Brent price outlook by $2/barrel

The US Energy Information Administration (EIA) raised its forecast for Brent crude prices by $2 per barrel for next year, while reducing its estimates on US crude production in 2019, according to the agency’s June Short-Term Energy Outlook report released Tuesday.

The EIA expects Brent spot prices to average $68 a barrel in 2019, up $2 from last month’s projections.

The benchmark grade is expected to average $71 per barrel in 2018

The US West Texas Intermediate (WTI) crude oil prices will average almost $7 per barrel lower than Brent prices in 2018 and $6 lower than Brent prices in 2019, the report said.

Meanwhile, US crude oil production is expected to rise 970,000 barrels per day (bpd) to 11.8 million bpd next year. In May, the agency expected a 1.14 million bpd year-over-year increase to 11.86 million bpd.

While US oil production was projected to touch a record 12 million bpd in Q4 2019, EIA has cut its expectations to about 11.97 million bpd.

As for 2018, the US energy agency increased its production estimate to 10.79 million bpd, expecting growth of 1.44 million bpd, compared to its previous estimate of 10.72 million bpd.

The agency expects OPEC's crude oil production to rise slightly next year, despite falling production in Venezuela and Iran.

Crude oil production from the OPEC will average 32 million bpd in 2018, a decrease of 0.4 million bpd from 2017. It is, however, expected to increase slightly to average 32.1 million bpd in 2019.

EIA expects the decrease from Venezuela and Iran to be “offset by increasing production from Gulf producers, primarily Saudi Arabia.”