US Believes Brent Crude Prices to Finish 2016 Lower than First Predicted







More oil is in storage worldwide than the U.S. Energy Information Administration thought, leading the government agency this week to lower its forecast of the average price of Brent crude oil for the remainder of the year. The EIA forecast the price to average $34 a barrel of oil, down from the $37 a barrel forecast made earlier.

The Energy Information Administration also believes the 2017 average will be $40 a barrel compared with the $50 forecast made last month.

“The lower forecast prices reflect oil production that has been more resilient than expected in a low-price environment and lower expectations for forecast oil demand growth,” stated EIA in its latest Short-Term Energy Outlook. It also predicts there wll be an increase of global liquids inventories by an annual average of 1.6 million barrels of oil a day in 2016 and another 0.6 million barrels a day in 2017.

“These inventory build are larger than previously expected, delaying the rebalancing of the oil market and contributing to lower forecast oil prices,” said the federal agency.

The same Short-Term Energy Oulook predicts global oil consumption will grow by 1.1 million barrels a day in 2016 and by 1.2 million barrels a day in 2017. The growth in 2015 was 1.3 million barrels daily.