The US Energy Information Administration (EIA) has revised up its Brent crude oil price forecast for 2020 by $1 per barrel, according to its monthly Short-Term Energy Outlook (STEO) report for May released on Tuesday.
The international benchmark is now expected to average $34 per barrel this year, up from its previous estimate of $33 a barrel.
While Brent crude is forecast to average $23 per barrel during the second quarter of 2020, it is anticipated to average $32 per barrel during the second half of the year.
The EIA said it forecasts Brent crude increasing to an average of $48 per barrel in 2021, as 'declining global oil inventories next year will put upward pressure on oil prices.'
In April's STEO, the administration lowered the forecast for Brent crude for this year by $10 per barrel from the previous month's estimate.
'EIA forecasts significant decreases in US liquid fuels demand during the first half of 2020 as a result of COVID-19 travel restrictions and disruptions to business and
economic activity,' STEO for May noted.
'EIA expects the largest impacts will occur in the second quarter of 2020 before gradually dissipating over the next 18 months,' it added.
-US crude output revised down
The EIA also revised down US crude oil production for this year by 100,000 barrels per day (bpd), according to the STEO for May.
Crude oil production in the country is now estimated to average 11.7 million bpd in 2020, compared to the previous expectation of 11.8 million bpd in the STEO for April.
'Typically, price changes affect production after about a six-month lag,' said the STEO for May.
'However, current market conditions will likely reduce this lag as many producers have already announced plans to reduce capital spending and drilling levels,' it added.
The US surpassed Saudi Arabia, and then Russia, in November 2018 to become the world's biggest crude oil producer.
By Ovunc Kutlu