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US EIA: Crude oil prices were generally lower in 2019 than in 2018

Published by , Deputy Editor
Oilfield Technology,

The price of Brent crude oil, the international benchmark, averaged US$6/bbl in 2019, US$7/bbl lower than its 2018 average. The price of West Texas Intermediate (WTI) crude oil, the US benchmark, averaged US$57/bbl in 2019, US$7/bbl lower than in 2018.

Compared with recent years, both crude oil prices traded within relatively narrow price ranges throughout the year. Brent prices reached an annual daily low of US$55/bbl in early January, rising to a daily high of US$75/bbl in late April. The resulting range of US$20/bbl is the narrowest since 2003. WTI prices ranged from US$47/bbl to US$66/bbl.

More recently, crude oil prices have increased following the 3 January US military operation in Iraq, likely reflecting an increase in geopolitical risk.

Although the 2019 range of daily prices remained relatively narrow, Brent and WTI front-month futures prices did experience their largest single-day price increases since 2008. On 26 September 2019, the first full day of trading after an attack on key energy installations in Saudi Arabia, Brent and WTI crude oil prices increased by US$9/bbl and US$8/bbl, respectively. The price increases were relatively short lived, and prices returned to pre-attack levels by the end of the month because of Saudi Arabia’s ability to bring production back online within weeks of the attack and global concerns about demand growth.

Throughout 2019, increases in US petroleum production put downward pressure on crude oil prices. In addition, the production increases likely limited the effect on prices from the attack on Saudi Arabia, production cut announcements from the Organization of the Petroleum Exporting Countries (OPEC), and US sanctions on Iran and Venezuela that limited crude oil exports from those countries.

Outside the US, crude oil production from major producers such as Saudi Arabia, Venezuela, and Iran declined in 2019. EIA expects that total OPEC crude oil production averaged 29.8 million bpd in 2019, a decline from the 2018 average of 32 million bpd. US crude oil imports from OPEC countries were at their lowest level in several decades. To continue limiting excess crude oil supply, on 7 December 2019, OPEC+ (OPEC plus 10 other nations such as Russia, Mexico, and Kazakhstan) announced they were deepening the production cuts originally announced in December 2018.

Based on the US Energy Information Administration’s (EIA) monthly data through October and short-term forecasts for November and December, 2019 will likely be a record year for several US crude oil and petroleum metrics. EIA expects that US crude oil and other liquids production will reach an annual average of 19.6 million bpd, the highest level on record. EIA also expects US crude oil production will average 12.3 million bpd in 2019, making the US the largest crude oil producer in the world.

In its December Short-Term Energy Outlook, EIA expects US crude oil and petroleum product net imports will average 490 000 bpd in 2019, down from 2.3 million bpd in 2018. In September and October, the US exported more petroleum (crude oil and products) than it imported for the first time on record, based on monthly values since 1973. EIA’s monthly data through December 2019 will be available by the end of February 2020.

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