The U.S.' Energy Information Administration (EIA) has revised down its Brent crude oil price forecast for 2020 by $10 per barrel, according to its monthly Short-Term Energy Outlook (STEO) report for April released on Tuesday.
The international benchmark is now expected to average $33 per barrel this year, down from its previous estimate of $43 a barrel.
While Brent crude is forecast to average $23 per barrel during the second quarter of 2020, it is anticipated to average $30 per barrel during the second half of the year.
The EIA said it forecasts Brent crude increasing to an average of $46 per barrel in 2021, as 'a return to declining global oil inventories puts upward pressure on prices.'
In March's STEO, the EIA lowered the forecast for Brent crude for this year by $18 per barrel.
'The Covid-19 pandemic has caused significant changes in energy fuel supply and demand patterns,' the EIA said in its April STEO.
'Crude oil prices, in particular, have fallen significantly since the beginning of 2020, largely driven by the economic contraction caused by COVID-19 and
a sudden increase in crude oil supply following the suspension of previously agreed upon production cuts among OPEC and partner countries,' it added.
OPEC and its allies failed on March 6 to make deeper and longer cuts in their production levels. The member countries of the group known as OPEC+ will hold a teleconference on Thursday to make significant cuts in their outputs.
-U.S. crude output revised down
The EIA also revised down the U.S.' crude oil production for this year by 1.2 million barrels per day (bpd), according to the STEO for April.
Crude oil production in the country is now estimated to average 11.8 million bpd in 2020, compared to the previous expectation of 13 million bpd in the STEO for March.
The administration said it expects a 15% activity reduction in the U.S.' oil industry in the second quarter of 2020 and a further 12% reduction in the third quarter due to the 'effects of Covid-19 on the level of drilling activity as many producers have already announced plans to reduce capital spending and drilling levels.'
The U.S. surpassed Saudi Arabia, and then Russia, in November 2018 to become the world's biggest crude oil producer.
By Ovunc Kutlu