This year, the average cost of Brent oil is expected to be at $53,5 per barrel. This is what the latest EIA report says. This means that the forecast has improved relative to the previous one. For the sake of comparison, the average price of Brent oil in 2016 was at $43,74 per barrel. In 2018, the average price is expected to exceed $56 per barrel.
As for WTI oil, the EIA reports expects the average WTI price to be around $52,5/b in 2017. This is higher than $50,66/b expected in December 2016. For the sake of comparison, the average price of Brent oil in 2016 was at $43,33 per barrel.
Also, the agency improved the forecast for the average oil production in the USA by as much as 200K barrels a day up to 9 million barrels a day in 2017. Moreover, the EIA expects the U.S. oil production ton increase all the way up to 9,3 million barrels in 2018.
More optimistic forecasts have to do with higher oil production in the Mexican Gulf. It’s all about higher production capacity partially resulting from more efficient drilling.
At the same time, Goldman Sachs experts anticipate $59/b for Brent oil in mid 2017 thanks to the Vienna Accord implying production cuts by OPEC and non-OPEC oil producers. Still, the experts don’t believe the prices will stay there for more than 6 months. The Vienna Accord signed in late 2016 is expected to result in a supply deficit in Q1 2017, thereby pushing the prices higher.
