EIA downgrades forecast for crude oil prices

Source: Xinhua| 2019-10-09 05:52:45|Editor: yan
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HOUSTON, Oct. 8 (Xinhua) -- The U.S. Energy Information Administration (EIA) on Tuesday forecast that Brent spot prices will average 59 U.S. dollars per barrel in the fourth quarter of 2019 and then fall to 57 dollars per barrel by the second quarter of 2020, which is five dollars per barrel lower than its previous forecast in September.

In its October Short-Term Energy Outlook, EIA expected downward oil price pressure to emerge in the coming months as global oil inventories rise during the first half of 2020, despite the recent increase in supply disruptions.

However, EIA forecast balances to tighten later in 2020 and expected Brent prices to rise to an average of 62 dollars per barrel in the second half of next year.

The resulting forecast average price in 2020 is 60 dollars per barrel, two dollars per barrel lower than forecast in the September Short-Term Energy Outlook.

EIA's October forecast recognized a higher level of oil supply disruption risk than previously assumed, more-than-offset by increasing uncertainty about economic and oil demand growth in the coming quarters, resulting in a lowered oil price forecast.

According to EIA, Brent crude oil spot prices averaged 63 dollars per barrel in September, up four dollars per barrel from August and down 16 dollars per barrel from the September 2018 average.

Brent spot prices began September at 61 dollars per barrel and increased to 68 dollars per barrel after attacks on major Saudi Arabian oil infrastructure disrupted the country's crude oil production. However, Brent spot prices have subsequently fallen, reaching 58 dollars per barrel on Oct. 4, as Saudi Arabia restored the shut-in production and concerns about oil demand based on the condition of the global economy rose.