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Crude oil prices fell on Tuesday following a higher-than-expected forecast for U.S. crude production and a larger-than-expected rise in U.S. consumer prices in February.
In its latest Short-Term Energy Outlook, the US Energy Information Administration raised its target to 2024 domestic oil production growth prospects of 260,000 bbl/day to 13.19 million barrels, compared to the previous forecast of an increase of 170,000 bbl/day.
The EIA had predicted that U.S. production would decline slightly through mid-2024 and not surpass the monthly production record of 13.3 million bbl/d set last December until February 2025, but the agency now forecasts steadily increasing production with production set to surpass last year’s record by Q4 2024.
On the demand side, the EIA projects that total U.S. oil consumption will increase by 200,000 bbl/d to 20.4 million bbl/d in 2024, then by another 200,000 bbl/d to 20.6 million of bbl/day in 2025, which is higher than previously expected.
Production cuts by the OPEC cartel and its allies will help push average 2024 WTI crude oil prices 5.8% to $82.15 a barrel, up 5.8% from forecasts precedents, and Brent oil at 87 dollars a barrel, up 5.6%. The EIA also provides.
Nymex front-month crude oil (CL1:COM) for April delivery fell for the fourth consecutive session, closing -0.4% at $77.56/bbl, while May Brent crude (CO1:COM) stabilized -0.3% at $81.92/barrel.
Meanwhile, April Nymex Natural Gas (NG1:COM) ended -2.5% to $1.714/MMBtu, after the EIA cut its forecast for this year’s U.S. natgas prices to an average of $2.27/MMBtu, down 14.4% from its February forecast.
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The US government reported a 0.4% increase in the consumer price index for February, the largest increase since September, while the core 12-month rate fell from 3.9% to 3.8%.
Given that the CPI reading “does not inspire expectations of rapid interest rate cuts, there is no reason to be extremely bullish right now” in oil, but there is also “little reason to be extremely bearish “, which has helped keep crude oil range-bound, DTN market analyst Troy Vincent told Marketwatch.