EIA Drops WTI Oil Price Forecast - Rigzone News

EIA Drops WTI Oil Price Forecast | Rigzone

EIA Drops WTI Oil Price Forecast

The U.S. Energy Information Administration (EIA) cut its West Texas Intermediate (WTI) spot average price forecast for this year and next year in its latest short term energy outlook (STEO).

According to its December STEO, the EIA now sees the WTI spot price averaging $77.63 per barrel in 2023 and $78.07 per barrel in 2024. The EIA projects that the WTI spot price will come in at $78.82 per barrel in the fourth quarter of 2023, $78.80 per barrel in the first quarter of 2024, $79.53 per barrel in the second quarter, $77.50 per barrel in the third quarter, and $76.50 per barrel in the fourth quarter, the December STEO shows.

In its previous STEO, which was released in November, the EIA forecast that the WTI spot price would average $79.41 per barrel in 2023 and $89.24 per barrel in 2024. That STEO projected that the commodity would average $85.93 per barrel in the fourth quarter of this year, $89.64 per barrel in the first quarter of next year, $90.34 per barrel in the second quarter, $89 per barrel in the third quarter, and $88 per barrel in the fourth quarter.

Both STEOs highlight that the WTI spot price averaged $94.91 per barrel in 2022. According to the December STEO, the WTI spot price average came in at $75.96 per barrel in the first quarter of 2023, $73.49 per barrel in the second quarter, and $82.25 per barrel in the third quarter.

In an oil and gas report published on December 14, which was sent to Rigzone, Macquarie strategists highlighted that they “have been bearish since September” and revealed that they were “now looking for 1Q24 to settle between the high $60s to low $70s for WTI”.

“The market may have finally moved into show me mode which will require some combination of substantial stock draws, stronger grades, structure, and margins before buying interest returns,” the strategists added.

“Unlike the last two years, the lack of themes and catalysts for 2024 is also limiting bullish enthusiasm; No China Reopening, OPEC+ Cuts, lower skepticism on shale production,” they continued.

In that report, the Macquarie strategists noted that WTI managed money and other net length increased by 2.9K contracts to 208.6K.

“Shorts decreased by 1.8K, while longs increased 1.1K,” they added.

“WTI managed money net length decreased by 14.4K contracts to 47.7K; shorts increased by 11.9K, while longs decreased 2.5K,” they continued.

“WTI Other net length grew by 17.2K contracts to 160.9K; shorts fell by 13.6 K, while longs grew 3.6K,” the strategists went on to state.

In a separate report published on December 7, which was also sent to Rigzone, Macquarie strategists projected that the WTI price would average $77.62 per barrel in 2023 and $72.88 per barrel in 2024.

In that report, Macquarie strategists forecast that WTI would average $80 per barrel in the fourth quarter of this year, $75.50 per barrel in the first quarter of 2024, $72 per barrel in the second quarter, $74.50 per barrel in the third quarter, and $69.50 per barrel in the fourth quarter of 2024.

A BMI report sent to Rigzone on December 15 showed that the company saw WTI crude averaging $79 per barrel in 2023 and $82 per barrel in 2024.

When executives from 146 oil and gas firms were asked where they expected the WTI crude oil price to be at the end of the year, as part of the third quarter Dallas Fed Energy Survey, the average response they gave was $87.91 per barrel.

The low forecast came in at $70 per barrel, the high forecast came in at $120 per barrel, and the price of WTI during the survey was $90.29 per barrel, the survey highlighted. The fourth quarter Dallas Fed Energy Survey is scheduled to be released on December 20.

To contact the author, email andreas.exarheas@rigzone.com

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