The US Energy Information Agency (EIA) released its periodic energy outlook report on 9 July 2019. Some of the highlights of the forecast are;
Brent crude oil spot prices averaged $64 per barrel (b) in June, $7/b lower than in May 2019 and $10/b lower than the price in June of last year. The Energy Information Administration (EIA) forecasts Brent spot prices will average $67/b in the second half of 2019 and remain at that level in 2020. EIA expects West Texas Intermediate (WTI) crude oil prices will average $62/b in the second half of 2019 and $63/b in 2020. EIA’s forecast WTI price of $63/b for December 2019 should be considered in the context of NYMEX WTI futures and options contract values for December 2019 delivery that traded during the five-day period ending July 3, 2019. These contracts suggest a range of $40/b to $84/b encompasses the market expectation for December NYMEX WTI prices at the 95% confidence level.
EIA forecasts global oil inventories will increase by 0.1 million barrels per day (b/d) in both 2019 and 2020. Rising global oil inventories largely reflect an increasingly weak outlook for global oil demand in 2019. EIA forecasts global oil demand will rise by 1.1 million b/d in 2019, 0.2 million b/d less than forecast in the June STEO. In 2020, EIA expects demand growth to average 1.4 million b/d.
EIA estimates that U.S. crude oil production averaged 11.0 million b/d in 2018, up 1.6 million b/d from 2017, achieving a record high for total production and year-over-year growth. EIA forecasts U.S. crude oil production will average 12.4 million b/d in 2019 and 13.3 million b/d in 2020, with most of the growth coming from the Permian region of Texas and New Mexico.
After rising by 2.7% in 2018, EIA forecasts that U.S. energy-related carbon dioxide (CO2) emissions will decline by 2.2% in 2019 and by 0.7% in 2020. EIA expects U.S. CO2 emissions will fall in 2019 and in 2020 because its forecast (based on data from the National Oceanic and Atmospheric Administration) assumes that temperatures will return to near normal. U.S. emissions are also expected to decline because the forecast share of electricity generated from natural gas and renewables increases while the forecast share generated from coal, which is a more carbon-intensive energy source, decreases.