The United States is expected to have its first year as a net oil exporter in 2020, the US Energy Information Administration (EIA) said in a monthly outlook published Tuesday
WASHINGTON (Pakistan Point News / Sputnik - 11th December, 2019) The United States is expected to have its first year as a net oil exporter in 2020, the US Energy Information Administration (EIA) said in a monthly outlook published Tuesday.
"EIA's December STEO forecasts that US net exports of crude oil and petroleum will continue to increase, averaging 570,000 barrels per day in 2020," the agency said in its latest Short-Term Energy Outlook. "If realized, 2020 would be the first year the United States becomes a net petroleum exporter on an annual basis."
The EIA said September was the first month where the United States recorded higher exports than imports of crude oil and petroleum products, since monthly record-keeping began in 1973. Annual records have been compiled since 1949.
The United States is already the world's largest oil producer, pumping 12.9 million barrels per day, according to weekly EIA data.
The EIA also forecasts that benchmark oil prices will fall rather than rise in the first half of next year despite some intermittent supply tightness expected from last week's pledge by world oil producers to cut up to 2.1 million barrels, or 2.1 percent, from global output through the first quarter.
Many analysts in the energy industry think that global oil benchmark Brent will trade above $65 per barrel by June, given the determination of the OPEC+ alliance of oil producers that include Saudi Arabia and Russia to keep the market tight even after the first quarter phase of its output pact.
The EIA had different ideas though.
"EIA continues to expect Brent prices to decline from current levels to an average of $59 per barrel in the first half of 2020, based on a forecast of rising global inventories," the agency said. "Some upward price pressures could emerge in the second half of the year as global oil demand growth is expected to recover on the back of a modest acceleration in global economic growth."
The agency also downplayed any major price boost to crude oil from the International Maritime Organization 2020 rules that will come into effect on January 1.
Ships using fuels with sulfur content above 0.5 percent will be banned from under the new regulations. Presently, vessels comply with a sulfur limit of 3.5 percent. US refineries underwent extensive maintenance in recent months to comply with the new standards, resulting in upward price pressure for products like diesel as fewer of such fuels were processed.
"The December outlook expects limited effects on the price of crude oil from forthcoming IMO 2020 regulations," the EIA said. "However, there are many unknowns about how the global refining and shipping industries will respond and how industry decisions will affect crude oil prices."
The EIA said the adoption of IMO 2020 regulations will likely increase the demand for light, sweet crude oil to produce lower-sulfur marine fuels, "and, we expect this shift to put about $2 per barrel of upward pressure on lower-sulfur- or light, sweet - crude oil prices."
However, the EIA said it also expects global oil inventories to generally increase as a result of non-OPEC supply growth, placing downward pressure on oil and petroleum product prices.
OPEC groups 14 countries in all: Algeria, Angola, Congo, Ecuador Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela. OPEC+ is the alliance grouping OPEC with 10 countries, namely Russia, Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, South Sudan and Sudan.
