OIL PRICES: $53 - $57
North Sea Brent crude oil spot prices averaged $52 per barrel (b) in April, $1/b higher than the March average and the fifth consecutive month that Brent crude oil spot prices averaged between $50/b and $55/b. EIA forecasts Brent prices to average $53/b in 2017 and $57/b in 2018. West Texas Intermediate (WTI) crude oil prices are forecast to average $2/b less than Brent prices in both 2017 and 2018.
NYMEX contract values for August 2017 delivery traded during the five-day period ending May 4 suggest that a range of $37/b to $63/b encompasses the market expectation for WTI prices in August 2017 at the 95% confidence level.
Implied global petroleum and liquid fuels inventories are estimated to have increased by 0.4 million barrels per day (b/d) in 2016. EIA forecasts inventory builds to average 0.2 million b/d in 2017 and then increase to an average of 0.5 million b/d in 2018.
U.S. crude oil production averaged an estimated 8.9 million b/d in 2016. U.S crude oil production is forecast to average 9.3 million b/d in 2017 and almost 10.0 million b/d in 2018. EIA estimates that crude oil production for April 2017 averaged 9.1 million b/d, which is 0.2 million b/d above the April 2016 level and 0.6 million b/d above the recent monthly average low reached in September 2016.
U.S. dry natural gas production is forecast to average 74.1 billion cubic feet per day (Bcf/d) in 2017, a 1.8 Bcf/d increase from the 2016 level. This increase reverses a 2016 production decline, which was the first annual decline since 2005. Natural gas production in 2018 is forecast to be 3.2 Bcf/d more than the 2017 level.
In April, the average Henry Hub natural gas spot price was $3.10 per million British thermal units (MMBtu), 22 cents/MMBtu above the March level. New natural gas export capabilities and growing domestic natural gas consumption contribute to the forecast Henry Hub natural gas spot price rising from an average of $3.17/MMBtu in 2017 to $3.43/MMBtu in 2018. NYMEX contract values for August 2017 delivery traded during the five-day period ending May 4 suggest that a range of $2.47/MMBtu to $4.49/MMBtu encompasses the market expectation for Henry Hub natural gas prices in August 2017 at the 95% confidence level.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.