The U.S. Energy Information Administration increased its forecast for West Texas Intermediate crude in 2013 and raised global demand estimates.
WTI will average $98.69 a barrel this year, up from the September projection of $98.59, the EIA, the Energy Department’s statistical unit, said today in its monthly Short-Term Energy Outlook. Consumption will be 90.26 million barrels a day this year, up from last month’s estimate of 90.06 million and last year’s demand of 89.29 million.
“Non-OECD Asia, particularly China, is the leading contributor to projected global consumption growth,” the agency said in the report. Other countries outside of the Organization for Economic Cooperation and Development also contribute to the increase, it said.
WTI prices will average $96.21 in 2014, unchanged from last month’s estimate. Demand in 2014 is 91.43 million, up from the previous estimate of 91.25 million. Brent crude’s premium to WTI is expected to average $9.27 this year and $6 in 2014.
Crude futures gained 50 cents, or 0.5%, to $103.53 a barrel at 10:51 a.m. on the New York Mercantile Exchange. WTI slipped 4.9% last month. Brent futures advanced 56 cents, or 0.5%, to $110.24 on the London-based ICE Futures Europe exchange. The Brent-WTI spread averaged $5.10 in September.
The EIA lowered the forecast for Brent, the European benchmark, as production recovered in Libya and the Syria conflict moderated. The grade will average $107.96 a barrel this year, down from September’s estimate of $108.12. The agency kept next year’s estimate unchanged at $102.21.
Protests in Libya’s oil fields cut the country’s production by an average of 1.2 million barrels a day in September, the EIA said. Outage fell to 930,000 barrels by the end of the month.
“Some of Libya’s production restarted in the second half of September after coming to a near-halt earlier in the month,” the EIA said.
Total global production outage averaged 3 million barrels a day last month, unchanged from the revised August estimate, which was the highest level since EIA started keeping the statistic in January 2011.
The EIA forecast U.S. output will be 7.47 million barrels a day in 2013 and 8.45 million in 2014.