The U.S. Energy Information Administration on Wednesday raised its 2018 and 2019 price forecasts on West Texas Intermediate and Brent crude oil prices and U.S. production expectations for this year and next. In its monthly energy outlook report, the government agency forecast an average WTI price of $68.46 a barrel for this year, up 2.1% from the forecast issued in September. For 2019, it forecast $69.56, up 3.3%. The EIA also raised its average Brent forecast by 2.2% to $74.43 this year, and by 1.9% to $75.06 next year. The EIA increased the domestic crude output forecast by 0.8% to 10.74 million barrels a day this year, and lifted the 2019 view by 2.2% to 11.76 million barrels a day. November WTI crude CLX8, -1.44% was down $1.88, or 2.5%, at $73.08 a barrel. December Brent LCOZ8, -1.59% lost $1.68, or 2%, to $83.32.
After several weeks of stability, the crude-oil market may once again be on the move.
Prices fell Tuesday morning in London as some market participants worried about the start of another downward shift.
“Most of the supportive factors for Brent are starting to fade,” said analysts at Energy Aspects.
After the steep selloff between June and January, the oil market had recovered in February, and appeared to reach some sort of a plateau toward the end of the month. In part, that was because of a rush to buy up oil stocks to be able to sell them at higher prices in the future, which absorbed some of the global glut.
But as storage tanks around the world have filled up, concerns about the oversupply of crude are returning. A barrel of Brent crude for April delivery was nearly 8% lower since the beginning of March. On Tuesday, the price of a barrel of Brent traded on London’s ICE Futures exchange fell 1.3% to be at $57.76 a barrel.
Energy Aspects said that while supplies had declined because of weather problems and technical issues, they are now starting to return—right at the time when the largest number of refineries around the world will be shut down for maintenance.
Asian purchases of crude oil have fallen to the lowest level since July 2014, and the number of very large crude carriers headed to China is at a five-month low, the research firm said.
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