EIA ups forecasts for oil prices
By Laman Ismayilova
Brent crude oil prices are expected to average $43.46 per barrel in 2016 and $51.66 per barrel in 2017, the US Energy Information Administration said in its December Short-Term Energy Outlook (STEO).
This is while in its November STEO, it forecasted average Brent oil prices at $43.30 per barrel in 2016 and $50.91 per barrel in 2017.
The Agency also revised upward its forecast for West Texas Intermediate (WTI) oil. According to December STEO, the WTI prices for 2016 and 2017 are expected to stand at $43.07 per barrel and $50.66 per barrel, respectively.
In EIA’s November report, the prices for WTI were forecasted at $42.84 per barrel in 2016 and $49.91 per barrel in 2017.
If OPEC agreement contributes to prices rising above $50 per barrel in the coming months, it could encourage a return to supply growth in US tight oil more quickly than currently expected, according to the report.
“Crude oil prices near $50 per barrel have led to increased investment by some US production companies, particularly in the Permian Basin,” said EIA. “A price recovery above $50 per barrel could contribute to supply growth in other US tight oil regions and in other non-OPEC producing countries that do not participate in the OPEC-led supply reductions.”
Meanwhile, oil prices continue to fall on the world markets after the price rise following the announcement of the OPEC deal.
On NYMEX (New York Mercantile Exchange) cost of the US Light crude oil decreased $0.86 to stand at $50.93. The price of Brent crude oil at the London ICE (Intercontinental Exchange Futures) fell $1.01 to trade at $53.93.
The price of a barrel of Azeri Light crude oil decreased $1.04 to stand at $54.91 on the world markets.
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