The narrowing price discount of WTI to Brent in the forecast is based on the assumption that current constraints on the capacity to transport crude oil from the Cushing, Oklahoma, storage hub to the US Gulf Coast will gradually lessen. Prices rallied after the longest stretch of declines in US inventories during winter in a decade. "Supply disruptions and falling U.S. and global inventories have driven crude oil higher", said Ole Hansen, head of commodity strategy at Saxo Bank in a note. The Saudi state oil company is expected to debut this year. "It's not completely unexpected, given the price momentum".
Federal U.S. estimates show total crude oil production hit 9.78 million barrels per day in the week ending December 15, a record high that Craig said was out of reach because of the recent U.S. cold snap. Global consumption of petroleum grew in 2017, and a strong economic backdrop should continue to drive consumption.
The EIA is out with the latest edition of its Short-Term Energy Outlook, examining projections for the energy industry for the next two years. Average WTI crude oil prices are forecast to stay between $4/b and $5/b lower than Brent prices in both 2018 and 2019, falling from the $6/b average price difference seen in the fourth quarter of 2017. Apart from greater domestic production, cargoes were even heard to be headed to the US from overseas.
Worldwide crude demand is 96 million barrels a day and the country imports around 4.2 million barrels daily or 1,568 million barrels per annum, making it the third-largest consumer globally. Regional summer price spikes can not be precisely predicted.The agency expects gasoline demand in 2018 to total about 9.3 million barrels a day this year, a level that would surpass all-time records set last year.
Total US petroleum and other liquid fuels consumption is forecast to average 20.3 mb/d this year, up 2.4% from 2017, and rising by another 340,000 b/d, or 1.7%, in 2019.
That would sideline the estimated 1 million barrels of Iranian oil per day on the market already and would come at a time when the market has little room for disruptions. He has a deep understanding of market fundamentals and the impact of global events on capital markets. China's overall trade surplus for 2017 was $422.5 billion, a decline from 2016.
Crude oil prices are up almost 4 percent in the span of seven trading days in one of the commodity's sharpest rallies in years.