OIL PRICES: $53 - $56
EIA - SHORT-TERM ENERGY OUTLOOK
Global Liquid Fuels
North Sea Brent crude oil spot prices averaged $50 per barrel (b) in May, $2/b lower than the April average. EIA forecasts Brent spot prices to average $53/b in 2017 and $56/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 September 2017 delivery that traded during the five-day period ending June 1 suggest that a range of $39/b to $64/b encompasses the market expectation for WTI prices in September 2017 at the 95% confidence level.
The Organization of the Petroleum Exporting Countries (OPEC) met on May 25 and announced an extension to voluntary production cuts through March 2018 that were originally set to end in June 2017. EIA forecasts OPEC crude oil production will average 32.3 million barrels per day (b/d) in 2017 and 32.8 million b/d in 2018.
EIA forecasts that implied global petroleum and liquid fuels inventories will decline by about 0.2 million b/d in 2017 and then increase by an average of 0.1 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 10.0 million b/d in 2018. The 2018 forecast exceeds the previous record level of 9.6 million b/d set in 1970.
In May, the average Henry Hub natural gas spot price was $3.15 per million British thermal units (MMBtu), 5 cents/MMBtu higher than in April. 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 $3.16/MMBtu in 2017 to $3.41/MMBtu in 2018. NYMEX contract values for September 2017 delivery that traded during the five-day period ending June 1 suggest that a range of $2.30/MMBtu to $4.41/MMBtu encompasses the market expectation for Henry Hub natural gas prices in September 2017 at the 95% confidence level.
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