The U.S.' Energy Information Administration (EIA) lowered oil price forecasts for 2020 by $3 per barrel, citing weak global economic indicators and U.S.-China trade tension, according to its Short-Term Energy Outlook (STEO) report for September.
The report released on Tuesday showed that the price estimate for international benchmark Brent crude is now lowered to $62 a barrel for next year, compared to August's STEO report when they forecast $65 per barrel.
The price expectation for American benchmark West Texas Intermediate (WTI) was also lowered to $56.50 per barrel for 2020, from the expectation of $59.50 a barrel in the previous month's report.
"Global economic indicators continued to decline, contributing to oil price declines and volatility," the STEO for September said.
The EIA also stressed that trade tension between the world's two biggest economies, the U.S. and China, also contributed to significant daily price declines.
"On August 23, WTI prices fell by 2% when China announced a 5% tariff on its imports of U.S. crude oil, the first time U.S. crude oil was included in Chinese tariffs," the report said.
-U.S. crude output forecast revised down
The EIA has also lowered estimates of the world's largest crude producer, the U.S., for 2019 and 2020 by 100,000 barrels per day (bpd).
According to September's STEO, this year U.S. crude oil production is expected to average 12.2 million bpd, and 13.2 million bpd next year.
In the previous month's report, crude oil production in the U.S. was anticipated to average 12.3 million bpd in 2019 and 13.3 million bpd in 2020.
By Ovunc Kutlu