The U.S. Energy Information Administration’s (EIA) October Short-Term Energy Outlook (STEO) indicates that oil market conditions are somewhat looser by the end of 2017 than previously projected. Although the annual average spot prices for West Texas Intermediate (WTI) and Brent are similar across the current and previous outlooks, quarterly WTI and Brent spot prices were revised more significantly. EIA’s October STEO Brent crude oil price forecast for the fourth quarter of 2016 and the first quarter of 2017 is $48 per barrel (b) about $3/b higher than in the September forecast, reflecting recent price movements and a reduction in near-term downside price risks. However, the forecast for prices toward the end of 2017 has actually been reduced, with prices for 2017 as a whole slightly below the September forecast. The recent activity of U.S. onshore producers, along with expectations of higher U.S. production in 2017, is one of the drivers for lowering EIA’s Brent crude oil forecast in the fourth quarter of 2017 to $55/b from a forecast of $58/b in the September STEO. …
Source: This Week in Petroleum