EIA pares Brent crude price forecast to $40/bbl for 2016

Energy Information Administration (EIA) lowered its 2016 forecast for North Sea Brent crude oil price to average of $40 per barrel, from the $55.78/bbl forecast last month.

The forecast price for Brent crude for 2017 is $50/bbl, EIA said in its short-term energy outlook released on Wednesday. The EIA hadn't previously released forecasts for 2017.

Brent averaged $38/bbl in December, a $6/bbl decrease from November, and the lowest monthly average price since June 2004. The average for 2015 was $52/bbl, down $47/bbl from the average in 2014, the report said.

Meanwhile, US West Texas Intermediate (WTI) crude prices for 2016 will average $2/bbl lower than Brent and $3/bbl lower in 2017, the US-based agency said.

The EIA estimates predict a fall in US crude oil production, which averaged an estimated 9.4 million barrels per day (bpd) in 2015, to 8.7 million bpd in 2016 and 8.5 million bpd in 2017.

According to the report, the crude oil production in December is estimated to have fallen by 80,000 bpd compared to the previous month.

US oil prices were near $30/bbl-mark early on Wednesday, despite both Brent and WTI seeing an increase.

At 10.35 am, Brent was up 0.94 percent to $31.15/bbl and WTI rose 1.22 percent to $30.81/bbl.