EIA Lifts Brent Forecast on Iran Sanctions Worries
NEW YORK (Dispatches) - The U.S. Energy Information Administration (EIA) is raising its Brent crude price forecast by USD 5/bl to USD 81/bl for the fourth quarter, citing uncertainty over the effects of U.S. sanctions on Iran.
OPEC members in the third quarter increased output by an amount greater than declining exports from Iran and Venezuela, the EIA said today in its Short-Term Energy Outlook. But "recent price increases indicate that oil market participants have concerns about the ability of Saudi Arabia, other OPEC members, and Russia to continue to offset expected further production declines in Iran and Venezuela," the agency said.
The EIA data are among the factors the administration must consider as it decides on the scope of waivers from Iran sanctions in coming weeks.
Administration officials insist that Iran's forced exit from the market, partial or full, will not have a significant effect on global crude markets as Saudi Arabia and other OPEC and non-OPEC producers, as well as growth in U.S. output, make up the gap. A rise in oil prices could hurt President Donald Trump's administration politically if Americans see a noticeable jump in what they pay for gasoline ahead of crucial midterm elections in November. Trump has taken to blaming OPEC producers for the recent increase.
The EIA estimated OPEC spare capacity at 1.3mn b/d in September — its lowest level since December 2016 when global oil inventory levels were much higher.
But the agency also forecasts that global oil supply and demand will be nearly balanced in 2019, contributing to downward pressure on the oil price.
The administration's economic brain trust has sought to downplay the risks to pump prices.
OPEC members in the third quarter increased output by an amount greater than declining exports from Iran and Venezuela, the EIA said today in its Short-Term Energy Outlook. But "recent price increases indicate that oil market participants have concerns about the ability of Saudi Arabia, other OPEC members, and Russia to continue to offset expected further production declines in Iran and Venezuela," the agency said.
The EIA data are among the factors the administration must consider as it decides on the scope of waivers from Iran sanctions in coming weeks.
Administration officials insist that Iran's forced exit from the market, partial or full, will not have a significant effect on global crude markets as Saudi Arabia and other OPEC and non-OPEC producers, as well as growth in U.S. output, make up the gap. A rise in oil prices could hurt President Donald Trump's administration politically if Americans see a noticeable jump in what they pay for gasoline ahead of crucial midterm elections in November. Trump has taken to blaming OPEC producers for the recent increase.
The EIA estimated OPEC spare capacity at 1.3mn b/d in September — its lowest level since December 2016 when global oil inventory levels were much higher.
But the agency also forecasts that global oil supply and demand will be nearly balanced in 2019, contributing to downward pressure on the oil price.
The administration's economic brain trust has sought to downplay the risks to pump prices.