EIA reports crude oil prices will be lower in 2019, 2020

Brent crude oil will average $61 per barrel in 2019 and $65 per barrel in 2020, according to the U.S. Energy Information Administration (EIA).

This is an increase from the end of 2018, but it is still lower than the 2018 average of $71/b.

U.S. regular retail gasoline prices will follow changes to the cost of crude oil, says EIA. Gas prices will dip from an average of $2.73/gallon in 2018 to $2.47/gallon in 2019. They are expected to rise to $2.62/gallon in 2020, which is still below the 2018 average. A $1-per-barrel change in the price of crude oil generally translates to roughly a 2.4-cent-per-gallon change in the price of gas.

Global petroleum and other liquid fuels inventories grew by an average rate of 0.4 million barrels per day (b/d) in 2018 and by 1.0 million b/d in the fourth quarter of 2018. EIA expects growth this growth to continue in the United States and in other countries not part of the Organization of the Petroleum Exporting Countries (OPEC). This will lead to global oil inventory growth rates of 0.2 million b/d in 2019 and 0.4 million b/d in 2020.

Oil production growth will be led by countries that are not part of OPEC, particularly the United States, said EIA. Non-OPEC producers will increase oil supply by 2.4 million b/d in 2019 which will offset forecast supply declines from OPEC members, resulting in an average of 1.4 million b/d in total global supply growth in 2019. Oil production is also expected to increase by 1.7 million b/d because of production growth in the United States, Canada, Brazil, and Russia. In comparison, overall OPEC crude oil production is expected to remain flat.

Global oil demand is anticipated to grow by 1.5 million b/d in both 2019 and 2020.