Energy Information Administration (EIA) raised its forecasts for the country and global benchmark crude prices this year - Photo: Special.

JAKARTA (TheInsiderStories) – United States’ (US) Energy Information Administration (EIA) raised its forecasts for the country and global benchmark crude prices this year. The agency also lifted its 2020 and 2021 expectations for US crude production, according to its Short-term Energy Outlook report released Tuesday (01/04).

US crude oil production is expected to rise by 1.06 million barrels per day (bpd) in 2020 to a record of 13.30 million bpd, above its previous forecast for a rise of 930,000 bpd. The output in 2021 is forecast to rise by 410,000 bpd to 13.71 million bpd, according to the EIA.

“We forecast US crude oil production will reach new records in 2020 and 2021, driven primarily by higher production in the Permian region of Texas and New Mexico,” EIA said in a statement.

EIA estimates the US has exported more total crude oil and petroleum products than it has imported since September. The agency forecasts that the US will be a net exporter of total crude oil and petroleum products by 0.8 million bpd in 2020 and by 1.4 million bpd in 2021.

The agency said both global oil supply and consumption are expected to grow in 2020, with supply from non-OPEC producers, particularly the US, Norway, Brazil, and Canada, more than offsetting declining production from OPEC. A shale boom has helped make the United States the world’s biggest oil producer, overtaking Saudi Arabia and Russia.

EIA forecasts Brent crude oil spot prices will average US$65 per barrel in 2020 and $68 in 2021, compared with an average of $64 in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $5.50 lower than Brent prices through 2020 and 2021, compared with an average WTI discount of about $7.35 in 2019.

Global liquid fuel inventories were mostly unchanged in 2019, and EIA expects they will grow by 0.3 million bpd in 2020 and then decline by 0.2 million bpd in 2021.

EIA sees that US refinery runs will rise by 3 percent from 2019 to a record level of 17.5 million bpd in 2020, resulting in refinery utilization rates that average 93 percent in 2020. EIA expects diesel wholesale will rise from an average of 43 cents per gallon (gal) in 2019 to a forecast peak of 53 cents per gal in March 2020 and an annual average of 50 cents per gal in 2020. EIA expects diesel margins to decline to 49 cents per gal in 2021.

US dry natural gas production set a new record in 2019, averaging 92.0 billion cubic feet per day (Bcfpd). EIA forecasts dry natural gas production will rise to 94.7 Bcfpd in 2020 and then decline to 94.1 Bcfpd in 2021. Production in the Appalachian region drives the forecast as it shifts from growth in 2020 to declining production in 2021.

The agency said the US coal production will total 597 million short tons (MMst) in 2020, down 93 MMst (14 percent) from 2019, as a result of declining domestic demand for coal in the electric power sector and lower demand for US exports. EIA expects that coal production will again fall by 16 MMst (3 percent) in 2021 as export demand stabilizes and declines in the US power sector demand slow.

For 2020, the agency expects US petroleum and other liquid fuels demand to climb 160,000 bpd to 20.64 million bpd in 2020, below its previous forecast for a rise of 170,000 bpd to 20.75 million bpd. Demand is expected to rise 70,000 bpd to 20.71 million bpd in 2021, the EIA said.

Meantime, the American Petroleum Institute (API) reported late Tuesday that US crude supplies rose by 1.1 million barrels for the week ended Jan. 10. The API data also showed a stockpile climb of 3.2 million barrels for gasoline, while distillate stocks rose by 6.8 million barrels.

API also forecast supply increases of 3.3 million barrels for gasoline and 1.3 million barrels for distillates. West Texas Intermediate crude for February delivery CLG20, -0.21 percent rose 15 cents, or 0.3 percent, to settle at $58.23 a barrel on the New York Mercantile Exchange, while March Brent BRNH20, -0.19 percent added 29 cents, or about 0.5 percent, to $64.49 a barrel on ICE Futures Europe.

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