The US Energy Information Administration (EIA) revised down global crude oil prices for 2020 and 2021, the EIA announced Wednesday.
International benchmark Brent crude is estimated to average $42.34 during the fourth quarter of this year and $47.07 per barrel next year, the EIA said in its Short-Term Energy Outlook (STEO) for October.
This revision sees prices lowering by 4% compared to estimates last month.
"Despite expected inventory draws in the coming months, EIA expects high inventory levels and surplus crude oil production capacity will limit upward pressure on oil prices," it said.
American benchmark West Texas Intermediate (WTI) is expected to average $38.76 for this year and $44.72 next year, the EIA said.
The EIA indicated that the revisions reflected the heightened levels of uncertainty due to mitigation and reopening efforts related to COVID-19.
"Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply patterns in 2020 and will continue to affect these patterns in the future," the Administration said.
- US crude output revised down
Because Libya is excluded from the current production agreement among members of the Organization of the Petroleum Exporting Countries and partner countries (OPEC+), the EIA said an increase in crude oil production from the country could significantly affect crude oil supply and inventories in the coming months.
The EIA revised down its US crude oil production estimate for this year to 11.2 million barrels per day (bpd) in 2020 and 11.09 million bpd in 2021. The average production in 2019 was 12.2 million bpd.
However, it estimated that production for September would rise to 11.2 million bpd but for the second quarter of 2021, production is set to decline to an average of 11.0 million bpd, as it said new drilling activity would not generate enough production to offset declines from existing wells.
The global oil supply outlook was also revised downward for next year.
Global supply is now forecast to average 94.58 million bpd this year, instead of the previous estimate of 94.60 million bpd; and will total 98.83 million bpd next year from the previous forecast of 99.34 million bpd.
The EIA lowered its total world consumption forecast for this year from 93.07 million bpd to 92.84 million bpd and from 99.60 million bpd to 99.09 million bpd for next year.
By Sibel Morrow