The United States’ Energy Information Administration (EIA) forecasts that Brent crude oil prices will average $71 per barrel in 2018 and $68 a barrel in 2019. Meanwhile, Nigeria’s Bonny Light crude oil has maintained an international price of $73.44 per barrel, higher than the Organisation of the Petroleum Exporting Countries (OPEC) basket price of $73.35 per barrel.
The price of Nigeria’s Bonny Light is higher than the Nigeria’s $51 per barrel benchmark for 2018 budget. EIA in its Monthly Oil Market report for May, expects oil prices to decline in the coming months because global oil inventories are expected to rise slightly during the second half of 2018 and in 2019.The updated 2019 forecast price is $2 a barrel higher than in the May forecast, which sold for an average price of $77 a barrel, an increase of $5 per barrel from April and the highest monthly average price since November 2014.
Even though the 2019 Oil price forecast is higher than it was in the May monthly report, EIA expects oil prices to decline in the coming months because global oil inventories are expected to rise slightly during the second half of 2018 and in 2019.According to EIA, expected inventory growth results from forecast oil supply growth outpacing forecast oil demand growth in 2019.
EIA currently forecasts global petroleum and other liquids inventories will increase by 210,000 barrels per day (b/d) next year, a factor that, all else being equal, typically puts downward pressure on oil prices. Most of the growth in global oil production in the coming months is expected to come from the United States.
EIA projects that U.S. crude oil production will average 10.8 million barrels per day for full-year 2018, up from 9.4 million barrels per day (bpd) in 2017, and will average 11.8 million bpd in 2019.
The agency noted that if the 2018 and 2019 forecast annual averages materialize, they would be the highest levels of production on record, surpassing the previous record set in 1970.EIA expects that OPEC crude oil production will average 32.0 million b/d in 2018, a decrease of about 0.4 million bpd from the 2017 level.
The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, expressed optimism that the price of crude oil would rise to a level that is neither too high nor too low. The Minister said though crude oil appears to have fallen into bad times because of prevailing low price and the campaign against the use of fossil fuels for environmental reasons, the product would soon rise up to take its place as the prime global energy source.
Waxing poetic message on the current crude oil prices recently, Kachikwu stated: “My name is oil, those who are kind to me call me black gold. Those who hate me call me crude. “I worry for my future; everyone now talks down on me. Even farmers who trembled at the sight of my name are now strategizing against me. “And all my beneficiaries, me have they abandoned, all because producers have lost their tracks. But I will rise again, and when I do, I will take no prisoners.
“I will new technologies control; I will my supremacy confirm; I will, my respect regain. “And my pricing, not too low, not too high; but I will not allow prices to humiliate me. All of you in OPEC, APPA, GCEF and all such bodies who have shown me no respect recently, soon, you’ll eat your words.”