The US Energy Department increased its predictions for domestic oil and petrol prices next year on Tuesday, citing fresh efforts by Saudi Arabia and OPEC+ to reduce the supply of oil.
Due to Saudi Arabia’s decision to reduce oil production and an agreement by OPEC+ to extend its output cutbacks, the US Energy Information Administration reduced its projection of global oil production through 2024.
The EIA stated that it anticipates “some upward pressure” on oil prices, “particularly in late-2023 and early-2024,” in reference to such supply reductions.
According to the research, the effect will be minimal in the short term, with a 2% increase in US and Brent oil prices predicted for the remainder of the year compared to the May prediction.
The EIA’s petrol report
Retail petrol prices are now projected by the EIA to average $3.41 per gallon in the third quarter, an increase of just 2.7% from the May prediction.
However, the greater effect won’t be seen until 2024. The EIA raised its prediction for US oil prices for the second quarter of 2019 by 11.4% and the third quarter by 14.5%. The fourth quarter of 2019 will now see an average oil price of $80 per barrel, up 19.4% from the EIA’s previous prediction.
In comparison to where they would have been before OPEC’s most recent actions, this will result in higher pricing for consumers.
Retail petrol prices are now anticipated to rise by 7.3% and 10.2%, respectively, to an average of $3.38 a gallon in the third quarter of 2019 and $3.21 in the fourth.
Even still, petrol costs are anticipated to remain far lower than they were last summer when the national average for normal petrol unexpectedly rose past $5 per gallon.
Retail petrol prices are now anticipated to rise by 7.3% and 10.2%, respectively, to an average of $3.38 a gallon in the third quarter of 2019 and $3.21 in the fourth.
Even still, petrol costs are anticipated to remain far lower than they were last summer when the national average for normal petrol unexpectedly rose past $5 per gallon.
