The largest global increase of crude oil inventories is expected in the second quarter of 2018.
The EIA’s Short-term energy outlook was revised slightly downward following OPEC’s announcement of an extension to production cuts for the next nine months.
OPEC’s crude oil production target will remain at 32.5 million barrels per day through to the end of the first quarter of 2018. As a result, the EIA now forecasts OPEC members’ crude oil production to average 32.3 million barrels per day in 2017 and 32.8 million barrels per day in 2018.
Total OPEC liquid fuels production is also expected to be lower than previously forecast however, continuing production growth in many non-OPEC countries is expected to moderate the pace of global liquid fuels inventory draws in 2017.
The largest global inventory increase in the forecast occurs in the second quarter of 2018, when Brazilian and OPEC production are expected to increase by 570,000 barrels per day and 220,000 barrels per day, respectively.
Supply growth in 2018 could contribute to downward pressure in oil prices as early as late 2017. However, EIA’s STEO forecast assumes that OPEC cuts will be extended beyond March 2018 but that non-compliance will begin to grow in late 2017 and increase in the second half of 2018.
The agency expects US crude oil production to increase through 2018, averaging 9.3 million barrels per day in 2017 and 10 million barrels per day in 2018.