The rise of oil prices to the maximum levels on January 9 reflected the investors' reaction to the Energy Information Administration's (EIA) forecast, according to which the average price of the Brent barrel in 2018 will be $59.74 compared to $57.26 in the December forecast, and the average price of WTI - $55.33, against the previous forecast of $52.77 per barrel. Now the EIA says it should come in at 10.51 million barrels a day by the fourth quarter, up 2.8 percent from the last projection; by the end of 2019, it could reach 11.04 million barrels a day. WTI crude reached its highest level since December 2014, underpinned by OPEC-led production cuts and expectations of another draw in USA crude inventories. The Brent benchmark was trading up 1.76 percent at 68.97 dollars. The forecast, which was part of the agency's Short-Term Energy Outlook for January, also said that the 2019 demand figure would stand at 101.76 million bpd - an increase of 1.65 million bpd from the current year.
Not even the persistent threat of USA shale producers exceeding 10 million barrels per day (bpd) this year could dampen Tuesday's market performance, although the EIA on Tuesday forecast that US output will be on the order of 10.8 million bpd, which puts it on par with Saudi Arabia and Russian Federation - and that American output will grow even more in 2019, to 11 million bpd. The decline in crude stocks fell short of industry group the American Petroleum Institute, which reported an 11 million-barrel crude draw on Tuesday evening. At the same time, US refiners export both diesel fuel and gasoline as well as crude.
The monthly average for February is expected to surpass 10 million bpd, said Tim Hess, the lead analyst for the report.
As oil prices marched up to three-year highs today, USA stockpile data somewhat dampened the black stuff's momentum. They see production this year at 10.27mbpd compared to 10.02m in their previous estimate.