Wti crude climbs $1/Bbl in 2020: Steo

West Texas Intermediate crude oil prices will average $62 a barrel in the second half of 2019, and $63/Bbl in 2020, the Energy Information Administration projects in the just-released Short-Term Energy Outlook (Steo), Kallanish Energy reports.

EIA’s forecast WTI price of $63/Bbl for December 2019, should be considered in the context of Nymex WTI futures and options contract values for December 2019 delivery that traded during the five-day period ending July 3, 2019.

These contracts suggest a range of $40/Bbl to $84/Bbl encompasses the market expectation for December Nymex WTI prices at the 95% confidence level.

EIA forecasts global oil inventories will increase by 0.1 million barrels per day (Mmbpd) in both 2019 and 2020. Rising global oil inventories largely reflect an increasingly weak outlook for global oil demand in 2019.

EIA forecasts global oil demand will rise by 1.1 Mmbpd in 2019, 0.2 million Bpd less than forecast in the June Steo.

In 2020, EIA expects demand growth to average 1.4 Mmbpd. EIA estimates U.S. crude oil production averaged 11.0 Mmbpd in 2018, up 1.6 Mmbpd from 2017, achieving a record high for total production and year-over-year growth.

EIA forecasts U.S. crude oil production will average 12.4 Mmbpd in 2019, and 13.3 Mmbpd in 2020, with most of the growth coming from the Permian Basin of West Texas/southeast New Mexico.

U.S. crude oil and petroleum product net imports will average 0.6 Mmbpd in 2019, down from an average of 2.3 Mmbpd in 2018.

EIA forecasts the U.S. will be a net exporter of crude oil and petroleum products at a rate of 0.1 Mmbpd by the fourth quarter of 2019, and by an average of 0.5 Mmbpd in 2020.

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