The US Energy Information Administration on Wednesday boosted its Brent and WTI crude oil price forecasts on uncertainty over the impact of the looming re-imposition of US sanctions on Iranian crude exports.
In its Short-Term Energy Outlook. which was delayed a day because Monday was a holiday in the US. EIA forecast Brent to average $74.43 b in 2018. up $1.59 from last month`s forecast. and WTI at $69.56 b in 2018. up $2.53 from last month.
The agency forecasts Brent to average $75.06 b and WTI to average $69.56 b in 2019. up $1.38 and $2.20. respectively. from last month`s forecast.
The jump in the price forecast was caused by `uncertainty about the amount that Iranian crude oil production could decline. and how much of the decline can be offset by other supplier.` EIA said in the report.
Iranian oil output averaged 3.4 million b d in September. down 120.000 b d from the August EIA outlook and the country`s lowest output since February 2016. The latest S&.P Global Platts OPEC supply survey estimated Iranian output at 3.5 million b d in September.
The US is expected to re-impose sanctions on Iranian crude November 5. which caused oil prices to rise to four-year highs in the second half of August and could lead to additional price increases. the agency said.
`If the reduction in Iranian crude oil production and exports is larger than expected. the disruption to the crude oil market in the fourth quarter of 2018 could result in price increases.` EIA said.
Along with Iran. Venezuelan oil output also continued to fall. declining to 1.23 million b d in September. down about 30.000 b d from August and down 1.17 million b d from December 2015. when the monthly output decline began.
But some OPEC members. along with Russia. have `largely offset production decreases` in Venezuela and Iran. EIA Administrator Linda Capuano said Wednesday in a statement.
Saudi oil production averaged 10.52 million b d in September. up 100.000 b d from August and the highest output level since November 2016. EIA said.
Total OPEC oil production is expected to average 32.46 million b d in 2018. down 220.000 b d from 2017. EIA said. Total OPEC oil production is expected to continue to fall to 32.14 million b d in 2019. EIA said.
EIA Wednesday also raised its forecast for US oil output. which it said will average 10.74 million b d in 2018 and 11.76 million b d in 2019. Those forecasts were up 80.000 b d and 260.000 b d. respectively. from last month`s forecast.
EIA expects that US oil production. which exceeded 11 million b d in August. will exceed 12 million b d by October 2019.