Monday, October 28, 2019
(October 28, 2019) — S&P Global Platts reviews that the Energy Information Administration (EIA) this month sharply lowered its oil price outlook for early next year. The agency cited increasing uncertainty about economic and oil demand growth, factors it sees more than offsetting the higher risks of supply disruptions after a Saudi oil facility attack.
EIA cut its Brent crude outlook by $5.31/bbl for the second quarter of 2020 to $56.69/bbl. It sees the international benchmark averaging $59.36/bbl in the fourth quarter of this year and $58/bbl in the first quarter of next year, down 97 cents and $4, respectively, from the its previous month’s outlook.
“Despite the recent increase in supply disruptions, EIA expects downward oil-price pressure to emerge in the coming months as global oil inventories rise during the first half of 2020,” EIA said in its October Short-Term Energy Outlook. The agency now expects Brent to aver- age $63.37/bbl in 2019, down 2 cents month to month, and average $59.93/bbl in 2020, $2.07 lower month over month.
West Texas Intermediate (WTI), the U.S. benchmark, is expected to average $53.86/bbl in the fourth quarter of this year, $52.50/bbl in the first quarter of next year, and $51.19/bbl in the second quarter of 2020. Those respective forecasts are 97 cents, $4, and $5.31 lower than the prior month’s outlook. EIA now sees WTI averaging $56.26/bbl in 2019 and $54.43/bbl in 2020.
U.S. oil production is expected to average 12.26 MMbbld in 2019, up 20,000 bbld from the previous outlook, and 13.17 MMbbld in 2020, down 60,000 bbld compared to EIA’s September forecast. EIA said U.S. oil output growth would pick up in the fourth quarter next year, supported by an uptick in the Gulf of Mexico as Permian Basin pipelines begin carrying more barrels to the Texas Gulf Coast. This follows relatively flat output for the first seven months of 2020 because of disruptions to Gulf drilling platforms and slowing growth in tight oil plays. Looking into 2020, EIA forecasts U.S. oil production growth will level off because of falling crude prices in the first half of the year and continuing declines in well productivity.
(SOURCE: The Weekly Propane Newsletter, October 28, 2019. Get the latest posted and spot prices from all major terminals and refineries around the U.S. by subscription.)
EIA cut its Brent crude outlook by $5.31/bbl for the second quarter of 2020 to $56.69/bbl. It sees the international benchmark averaging $59.36/bbl in the fourth quarter of this year and $58/bbl in the first quarter of next year, down 97 cents and $4, respectively, from the its previous month’s outlook.
“Despite the recent increase in supply disruptions, EIA expects downward oil-price pressure to emerge in the coming months as global oil inventories rise during the first half of 2020,” EIA said in its October Short-Term Energy Outlook. The agency now expects Brent to aver- age $63.37/bbl in 2019, down 2 cents month to month, and average $59.93/bbl in 2020, $2.07 lower month over month.
West Texas Intermediate (WTI), the U.S. benchmark, is expected to average $53.86/bbl in the fourth quarter of this year, $52.50/bbl in the first quarter of next year, and $51.19/bbl in the second quarter of 2020. Those respective forecasts are 97 cents, $4, and $5.31 lower than the prior month’s outlook. EIA now sees WTI averaging $56.26/bbl in 2019 and $54.43/bbl in 2020.
U.S. oil production is expected to average 12.26 MMbbld in 2019, up 20,000 bbld from the previous outlook, and 13.17 MMbbld in 2020, down 60,000 bbld compared to EIA’s September forecast. EIA said U.S. oil output growth would pick up in the fourth quarter next year, supported by an uptick in the Gulf of Mexico as Permian Basin pipelines begin carrying more barrels to the Texas Gulf Coast. This follows relatively flat output for the first seven months of 2020 because of disruptions to Gulf drilling platforms and slowing growth in tight oil plays. Looking into 2020, EIA forecasts U.S. oil production growth will level off because of falling crude prices in the first half of the year and continuing declines in well productivity.
(SOURCE: The Weekly Propane Newsletter, October 28, 2019. Get the latest posted and spot prices from all major terminals and refineries around the U.S. by subscription.)
