The US Energy Information Administration (EIA) has revised up its Brent crude oil price forecast for 2020 by $0.48 per barrel, according to its monthly Short-Term Energy Outlook (STEO) report for September released on Wednesday.
The international benchmark is now expected to average $41.90 per barrel this year, up from its previous estimate of $41.42 a barrel.
Brent crude prices averaged $50 per barrel during the first quarter of 2020 and $29 per barrel during the second quarter of this year. The administration now forecasts $43.9 a barrel in the third quarter of 2020 and $44.1 a barrel in the fourth quarter of the year.
The EIA said it estimates that Brent will average $49 per barrel next year, as oil markets become more balanced.
The administration said it expects high inventory levels despite expected inventory draws in the coming months with surplus crude oil production capacity limiting upward pressure on oil prices.
US crude output revised down
The EIA revised down its US crude oil production estimate for this year to 11.4 million barrels per day in 2020 and 11.1 million barrels per day in 2021. The average production in 2019 was 12.2 million barrels per day.
In September, the EIA expects production to rise to 11.2 million barrels per day, as production in the Gulf of Mexico returns.
However, after September, the EIA said it expects US crude oil production to decline slightly, averaging just under 11 million barrels per day during the first half of 2021, as new drilling activity will not generate enough production to offset declines from existing wells.
According to the EIA, drilling activity is expected to rise later in 2021, contributing to US crude oil production reaching an average of 11.3 million barrels per day in the fourth quarter of 2021.
The US surpassed Saudi Arabia and Russia in November 2018 to become the world’s largest crude oil producer.