EIA raises Brent, WTI crude prices by $3 a barrel for 2019

The US Energy Information Administration (EIA) on Thursday raised its 2019 price forecast for Brent and West Texas Intermediate (WTI) crude by $3 a barrel from its last month’s outlook.

Brent will average $74 per barrel, while WTI will average over $67 per barrel next year, it added.

However, EIA said it expects global oil inventories to rise by about 0.1 million barrels per day (mbd) next year, which is 0.2 million mbd lower than previously forecast.

According to the report, the United States surpassed Russia and Saudi Arabia to become the world’s largest crude oil producer earlier this year.

In February, US crude oil production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the US surpassed Russia in crude oil production for the first time since February 1999.

Meanwhile, the US crude oil production averaged 10.9 mbd last month, up by 120,000 barrels per day (bpd) from June. It forecasts that crude oil production will average 10.7 mbd in 2018, up from 9.4 mbd in 2017, and will average 11.5 mbd in 2019.

Separately, the International Energy Agency (IEA) said that global oil demand will hit a high of 100.3 mbd in the final quarter of this year, before moderating to 99.3 mbd in the first quarter of next year

Oil production hit 100 mbd in August, but prices may rise as exports from Iran and Venezuela decline.

“We are entering a very crucial period for the oil market. The situation in Venezuela could deteriorate even faster, strife could return to Libya and the 53 days to Nov. 4 will reveal more decisions taken by countries and companies with respect to Iranian oil purchases,” the report said.

"It remains to be seen if other producers decide to increase their production. The price range for Brent of $70-$80 per barrel in place since April could be tested.”

Demand for crude from the Organization of the Petroleum Exporting Countries (OPEC) will moderate to 31.9 mbd in 2019, from an estimated 32.3 mbd this year, the IEA added.