EIA trims Brent crude 2016 price forecast to $38/bbl

The Energy Information Administration (EIA) further lowered its 2016 price forecast for North Sea Brent crude oil to an average of $38 per barrel (bbl), down from its January estimate of $40.

The forecast for 2017 was maintained at $50/bbl, according to EIA’s monthly report issued Tuesday.

Brent averaged $31/barrel in January, a $7/bbl decrease from December, and the lowest monthly average since December 2003.

“Growth in global liquids inventories, which averaged 1.8 million barrels per day (b/d) in 2015, continues to put downward pressure on Brent prices,” EIA said.

Forecast prices for West Texas Intermediate (WTI) crude oil are expected to average the same as Brent in 2016 and 2017.

EIA also retained its previous forecast on US crude oil production, with output estimated to average 8.7 million barrels per day (bpd) in 2016 and 8.5 million bpd in 2017.

The crude oil production in January was 70,000 bpd below the December level, which was 9.2 million bpd, the agency said.

The prices for both Brent and WTI crude plunged following the report. Brent was down to $31.05/bbl, while WTI slipped to $28.56/bbl at 9.30 am Dubai time on Wednesday.