EIA expects OPEC to further cut crude oil production in 2020

The U.S. Energy Information Administration (EIA) on Tuesday forecast that the Organization of the Petroleum Exporting Countries (OPEC) will reduce crude oil production in 2020.

In its February Short-Term Energy Outlook (STEO), the EIA expected OPEC to cut crude oil output by 0.5 million barrels per day from March through May because of lower expected global oil demand in early 2020, and the production will average 28.9 million barrels per day in 2020, which is 0.3 million less than forecast in the January STEO.

In general, the EIA estimated that OPEC will limit production through all of 2020 and 2021 to target relatively balanced global oil markets.

The U.S. Energy Information Administration (EIA) on Tuesday forecast Brent crude oil spot prices would average 61 U.S. dollars per barrel in 2020, compared with 65 dollars per barrel projected a month ago.

In its February Short-Term Energy Outlook (STEO), EIA forecast Brent prices would average 58 dollars per barrel during the first half of the year and 64 dollars per barrel during the second half of the year.

EIA also forecast Brent prices would average 68 dollars per barrel in 2021, the same level as it forecast last month.

EIA said Brent prices averaged 64 dollars per barrel in January, down 4 dollars per barrel from December 2019, adding that "Brent prices fell steadily through January and into the first week of February."

Oil prices continued the downtrend for the week ending Feb. 7 with the price of West Texas Intermediate (WTI) for March delivery down 2.4 percent and Brent crude oil for April delivery down 6.34 percent.

After five consecutive weeks of decline in oil prices, the longest streak of weekly drops since 2018, WTI and Brent crude have decreased by 17.59 percent and 17.47 percent, respectively, so far this year.