EIA increases crude production forecasts

The US Energy Information Administration (EIA) raised its crude production forecast for 2018 by 200,000 b/d to 9.73mn b/d.

The agency also increased its output forecast for this year by 230,000 b/d compared to the previous estimate, to about 9.21mn b/d, according to its monthly Short Term Energy Outlook (Steo).

The US drilling rig count is set to see a steady recovery as oil prices hold above the $50/bl mark, making operations economic for many producers, especially in low cost basins like the Permian in west Texas and eastern New Mexico.

The global oil market is also showing signs of closer balance between supply and demand in early 2017, the EIA said. The agency expects "a relatively balanced" global oil market in the next two years, with inventory builds averaging 100,000 b/d in 2017 and 200,000 b/d in 2018.

Oil prices traded in a narrow range in February with a $4/bl difference between the highest and lowest prices of the month.

The EIA expects Brent prices to average about $55/bl in 2017 and $57/bl in 2018, steady from the previous forecast. WTI prices are expected to average about $1/bl lower than Brent in the forecasts.