The Energy Information Administration (EIA) has lowered its crude oil price forecasts amid an increase in global liquids inventories and continuing supply growth.
The changed forecast expects that West Texas Intermediate (WTI) crude oil will average $49 (€43) per barrel in 2015 and $54 (€48) per barrel in 2016, a drop of $6 and $8 per barrel respectively.
The revision follows concerns over the pace of economic growth in emerging markets, continuing (albeit slowing) supply growth, increases in global liquids inventories as well as the possibility of increasing volumes of Iranian crude oil entering the market.
Since the beginning of 2015, North Sea Brent has traded at around $5 per barrel more than WTI and in its short term outlook the EIA expects this price spread to persist through to at least 2016. The global oil glut coupled with declining demand has forced benchmark prices to sharply decline.