Oil Price Hits High Level Amid China Growth, US Stockpiles
Oil prices slipped on Wednesday after Brent crude earlier hit 2019 high above US$72 a barrel. Photo by In-Cyprus.

JAKARTA (TheInsiderStories) – United States’ Energy Information Administration (EIA) revised down Organization of the Petroleum Exporting Countries (OPEC) crude oil production around 30.3 million barrels per day (bpd) in 2019, down by 1.7 million bpd from 2018.

In 2020, EIA sees OPEC’ crude oil production to fall by 400,000 bpd to 29.8 million bpd. Production in Venezuela and Iran account for most of the OPEC output declines in 2019 and in 2020, but EIA expects these decline to be partially offset by production of other OPEC members.

Furthermore, EIA forecasts global oil inventories will decline by 200,000 bpd in 2019 and then increase by 100,000 bpd in 2020. While, global demand outpaces supply in 2019 in EIA’ forecast, but global liquid fuels supply will rises by 1.9 million bpd in 2020, with 1.5 million of that growth coming from the US.

Then, global oil demand its expecting rises by 1.5 million bpd in 2020, up from expected growth of 1.4 million bpd in 2019. Relatively warm weather combined with ongoing increases in natural gas production contributed to the largest injection of natural gas into the US working storage in April going back to at least 1976.

The report also shown, the larger-than-normal injections in April pushed US natural gas storage levels to near the five-year average level. EIA estimates that domestic stocks of working natural gas at the end of April were 314 billion cubic feet (BCF) or 17 percent lower than the five-year average compared with 486 BCF or 29 percent lower at the end of March.

If the estimate is confirmed in monthly data, EIA said, April would be the first month since November 2016 to show a year-on-year increase in natural gas working inventories.

EIA rated that the US retail diesel price for this year to average $3.18 gallon, flat with a year ago while the 2020 price estimate at $3.29 gallon is up more than a dime from this year.

Talking about price, Brent crude oil spot prices averaged $71 per barrel in April, up to $5 per barrel from March 2019 and just below the price in April of 2018. EIA forecasts Brent spot prices will average $70 per barrel in 2019 and $67 bpd in 2020.

Both about $5 per barrel higher than in last month, compared with an average of $71 per barrel in 2018. EIA’ higher Brent crude oil price forecast reflects tighter expected global oil market balances in mid-2019 and increasing supply disruption risks globally.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com