Global oil markets are tightening as OPEC supply falls, the IEA said, while warning it could lower demand forecasts because of economic threats.
Nonetheless, the IEA warned that clouds are gathering over the outlook for demand. While the agency kept its estimates for 2019 global consumption growth unchanged, predicting an expansion of 1.4 million barrels a day, or 1.4 percent, it highlighted a number of dangers.
Oil retreated from a 5-month high as an increase in U.S. crude inventories to the highest since late 2017 overshadowed OPEC's efforts to reduce production.
3. Oil Prices Backtrack
One day after breaking through a key resistance level, May West Texas Intermediate (WTI) oil futures backtracked by $1.03 Thursday to settle below that threshold – at $63.58 per barrel. The WTI peaked at $64.49 and bottomed out at $63.31.
4. EIA revises up oil price forecasts for 2019
Due to a slightly tighter global oil market, the US Energy Information Administration, in its latest Short-Term Energy outlook, forecasts Brent spot prices to average $65/bbl in 2019, up $2/bbl from last month’s STEO forecast, and $62/bbl in 2020.
These compare with an average of $71/bbl in 2018.
EIA expects that West Texas Intermediate crude oil prices will average $8/bbl lower than Brent prices in the first half of this year before the discount gradually falls to $4/bbl late this year and through 2020.