Brent crude oil prices will average $65.15 per barrel in 2019 and $62 per barrel in 2020 according to the most recent forecast from the US Energy Information Administration's monthly Short-Term Energy Outlook (EIA). This reflects an upward revision of $2.37 per barrel for 2019 compared to the previous estimate.
- The OECD Economic Outlook as of November 2018 is more bullish, pegging the real price of a barrel of Brent oil— i.e. price adjusted for inflation—at $80/barrel in 2019.
- Looking out to 2020, the IMF in its Primary Commodity Prices Projections released in July asserted that after modest growth in 2018, the nominal price of Brent crude will increase to $53.5/barrel by 2020 and West Texas Intermediate to $50.36/barrel.
- The World Bank anticipates that all three major benchmark oil prices, Brent, WTI, and Dubai, will continue to increase after 2020 to reach $70 per barrel on average in 2030.
Oil price forecasts depend on the interaction between supply and demand for oil on international markets. Among the most important supply-side factors weighing on pricing expectations are US shale oil production, US crude oil stocks, and OPEC oil supply.
- On December 7, 2018, OPEC and non-OPEC countries agreed to cut oil production by 1.2 million barrels a day beginning in January for a six-month period. The agreement from OPEC, in spite of increasing US crude oil inventories, has buoyed oil prices during the start of 2019. By April, Brent crude price reached $71.12 per barrel, which is $22 higher than at the end of December of the previous year.
- But, the robust increase of US shale oil activity, which is expected to continue, is broadly expected to limit price gains in the future.
- According to the OPEC Monthly Oil Market Report, world oil demand will increase by 1.3 million barrels per day in 2019.
Last updated: Monday, 15 April 2019