WTI Crude Oil and Natural Gas Forecast

Gladys Abbott
March 15, 2019

The U.S. sanctions targeting Iran's and Venezuela's oil sector also create an upward pressure.

Crude oil prices started Thursday on a higher note, after USA crude oil inventories and production showed declines that eased some concerns over the rising supply glut in the global oil market. For both benchmarks, these are prices that haven't been seen since mid-November.

The EIA said Tuesday in its Short-Term Energy Outlook report for March that it now expects crude oil production in the U.S.to average 12.3 million barrels per day (bpd) in 2019 and 13 million bpd in 2020.

Meanwhile, U.S. gross petroleum trade, which stands for imports plus exports, reached an all-time high of 17.5 million barrels per day.

Gasoline inventories were down 4.62 million barrels last week, almost twice the expected drop.

Uncertainty over the progress of U.S.

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In parallel, domestic oil output dipped by 100,000 barrels a day to reach 12.0m b/d with refineries operating at 87.6% of capacity.

Iraq is committed to OPEC oil output cuts.

Forecasts slowed U.S. production to a record of 13 million barrels per day (bps) until the third quarter of 2020, instead of the second quarter of previous forecasts. "The second wave of the USA shale revolution is coming", added Fatih Birol, the IEA's executive director in a press release recently.

Another influence for traders was USA sanctions against oil exports from Iran and Venezuela said to be contributing to the tightening: Barclays noted that "Failures in [Venezuela's] electrical system. This will shake up global oil and gas trade flows, with profound implications for the geopolitics of energy".

The OPEC Reference Basket (ORB), a weighted average of prices for petroleum blends produced by the cartel's members, rose in February for the second consecutive month, increasing by about 9 percent, or 5.09 US dollars, month-on-month to average 63.83 USA dollars per barrel, said the report.

The Russian national currency followed the pickup in the oil price as the dollar exchange rate dropped 0.13% to 65.32 rubles on the Moscow Exchange, while the euro lost 0.12% to 74.01 rubles.

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