USA EIA Drops WTI Oil Price Forecasts

SEATTLE (Scrap Monster): The U.S. Energy Information Administration (EIA) reduced its West Texas Intermediate (WTI) spot price forecasts in its latest short term energy outlook (STEO), which was released recently.

In the STEO, the EIA projected that the WTI spot price will average $78.80 per barrel in 2024 and $79.63 per barrel in 2025. The EIA’s previous STEO, which was released in August, forecast that the commodity would average $80.21 per barrel this year and $81.21 per barrel in 2025.

The EIA’s latest STEO projected that the WTI spot price will average $78.23 per barrel in the third quarter of this year, $77.64 per barrel in the fourth quarter, $79.02 per barrel in the first quarter of next year, $80.50 per barrel across the second and third quarters, and $78.50 per barrel in the fourth quarter of 2025.

In its previous STEO, the EIA projected that the WTI spot price would average $79.95 per barrel in the third quarter of this year, $81.47 per barrel in the fourth quarter, $84.16 per barrel in the first quarter of next year, $81.83 per barrel in the second quarter, $80.50 per barrel in the third quarter, and $78.50 per barrel in the fourth quarter of 2025.

The latest EIA STEO put the first quarter 2024, second quarter 2024, and overall 2023 WTI spot price averages at $77.50 per barrel, $81.77 per barrel, and $77.58 per barrel, respectively.

A Standard Chartered Bank report sent to Rigzone this week by Standard Chartered Bank Commodities Research Head Paul Horsnell revealed that the company sees the NYMEX WTI basis nearby future crude oil price averaging $79 per barrel in the third quarter of 2024, $84 per barrel in the fourth quarter, $86 per barrel in the first quarter of 2025, $89 per barrel in the second quarter, $92 per barrel in the third quarter, and $90 per barrel in the fourth quarter.

A separate Standard Chartered Bank report sent to Rigzone on August 20 by Horsnell had identical WTI price forecasts.

Earlier this week, a research note sent to Rigzone by the JPM Commodities Research team showed that J.P. Morgan forecasts that the WTI spot price will average $77 per barrel in 2024 and $71 per barrel in 2025.

J.P. Morgan expects the commodity to average $80 per barrel in the third quarter of 2024, $76 per barrel in the fourth quarter, $78 per barrel in the first quarter of next year, $73 per barrel in the second quarter, $69 per barrel in the third quarter, and $65 per barrel in the fourth quarter, according to the note.

A BMI report sent to Rigzone last week by the Fitch Group forecast that the front month WTI crude price will average $78 per barrel in 2024 and $75 per barrel in 2025.

In a market analysis sent to Rigzone on September 12, which focused on the WTI price, Rania Gule, a Senior Market Analyst at XS.com, warned that “crude oil prices are set to experience significant fluctuations, with OPEC’s role remaining undeniable”.

“Technically, oil faces a long road to recovery before it can surpass the $75 mark,” Gule added in that analysis.

“The initial resistance is at $67.11, and the price needs to close above this level at least on a daily basis to initiate a recovery attempt. Once this level is regained, $70 becomes the target, with $71.46 as the first key level to test and sustain,” Gule continued.

“Ultimately, a return to $75.27 remains possible, but it is more likely to occur due to a significant shift in current conditions and pressures,” Gule went on to state.

Courtesy: www.reuters.com