The U.S.' Energy Information Administration (EIA) has revised down its Brent crude oil price forecast for 2020 by $18 per barrel, according to its monthly Short-Term Energy Outlook (STEO) report for March released on Wednesday.
The international benchmark is now expected to average $43 per barrel this year, down from its previous estimate of $61 a barrel.
While Brent crude is forecast to average $37 per barrel during the second quarter of 2020, then it is anticipated to average $42 per barrel during the second half of the year.
The EIA said it forecasts Brent crude price increasing to an average of $55 per barrel in 2021, as "declining global oil inventories put upward pressure on prices."
Price of Brent crude plummeted to $31 per barrel on Monday to mark its lowest level in four years after Saudi Arabia-led OPEC, together with Russia-led non-OPEC, failed to reach a deal to curb their oil production levels against the negative impact of coronavirus on low oil demand around the world.
"OPEC will target market share instead of a balanced global oil market," the EIA said in its STEO report.
"EIA forecasts OPEC crude oil production will average 29.2 million barrels per day (bpd) from April through December 2020, up from an average of 28.7 million bpd in the first quarter of 2020," the report said.
For 2020, the administration forecasts OPEC crude oil production will rise to an average of 29.4 million bpd in 2021.
- U.S. crude output revised down
The EIA also revised down the U.S.' crude oil production for this year by 200,000 bpd, according to the STEO for March.
Crude oil production in the country is now estimated to average 13 million bpd in 2020, compared to the previous expectation of 13.2 million bpd in the STEO for February.
"EIA models show oil prices affect production after about a six-month lag," the report noted.
The U.S. surpassed Saudi Arabia, and then Russia, in November 2018 to become the world's biggest crude oil producer.
Saudi Arabia and Russia had formed the alliance known as OPEC+ in December 2016. Since then, the two heavyweights have cut their oil production levels three times to support prices, but they have lost market share to U.S. shale oil producers.
By Ovunc Kutlu