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EIA raises US crude output forecasts

09 May 2017 18:20 (+01:00 GMT)
EIA raises US crude output forecasts

Houston, 9 May (Argus) — The Energy Information Administration (EIA) raised its US crude production forecast for 2017 by 90,000 b/d to 9.31mn b/d.

The agency also increased its output forecast for 2018 by 60,000 b/d to 9.96mn b/d compared to the previous forecast, according to the agency's monthly Short Term Energy Outlook (Steo). Crude production in the fourth quarter of 2018 is expected to reach 10.22mn b/d.

The EIA lowered its 2017 price forecast for Ice Brent and WTI because of expected increases in global crude supply.

The Brent spot price is forecast to average $52.60/bl this year, down by $1.63/bl from the previous forecast and WTI should average $50.68/bl, down by $1.56/bl.

The EIA kept its 2018 price forecasts for Brent and WTI steady at $57.10/bl and $55.10/bl respectively.

Price spreads between Brent and medium-sour Middle Eastern oils continue to narrow, making light, sweet crude from the Atlantic basin more price competitive for consumers in Asia, the EIA said.

Since the previous administration of US President Barack Obama lifted 40-year old restrictions on most oil exports in December 2015, US light oil has been exported to countries around the globe, including several in Asia.

Total US crude exports averaged about 834,000 b/d in March, falling from about 1.1mn b/d in February, according to the most recent trade data from the US Census Bureau.

Canada was the top destination in March, as that country imported about 294,000 b/d of US crude. Canada had dropped to the number two position in February when China was the top importer of US crude.

China in March imported 117,000 b/d of crude form the US. South Korea took about 84,000 b/d.

Increased flows of light, sweet crude into Asia are lowering prices of local Asian crude of similar quality, the EIA said.