The U.S. Department of energy has lowered its forecast for the oil price

The energy information administration, the U.S. Department of energy (EIA) has lowered its forecast for the Brent crude oil price. Its average cost in 2016 will be $34,28 per barrel, said in the monthly EIA short-term forecast. In February, the administration predicted that the Brent price will be $37,52/bbl.

EIA also $10 lowered its forecast for 2017. If in February it amounted to about $50/bbl., it is now at $40,09/bbl. Expectations for the average price of West Texas Intermediate (WTI) in 2016 have been dropped from $37,59/bbl. up to 34.04 per barrel.

In the March report was revised the growth forecast of world oil consumption. The forecast for 2016 was lowered to 90 thousand barrels per day to 1.15 million, for 2017 — on 250 thousand Barr. a day, and 1.21 million

EIA expects that the growth in oil demand in the U.S. this year will be 80 thousand Barr. a day. In February, the administration predicted that the figure will reach 110 thousand barrels. Expectations for 2017 were lowered to 160 thousand barrels, with 260 thousand

The office also doubled the projected decline in oil production in the U.S. in 2017. If in February it amounted to 230 thousand barrels per day, the EIA expected reduction on 480 thousand barrels daily. The decline in production this year, according to the report, will be 760 thousand barrels per day vs. expected in February 740 thousand barrels. With the expectations of the average volume of production in the USA remained at the level of 8.7 million barrels a day.

“Global stocks over the next two years is expected to grow at a higher rate due to higher world production and reduced demand for oil due to weak economic growth. The growth of oil reserves in the world leads to a tendency by delaying the rebalancing of supply and demand in the world market, causing prices remain at a low level,” — explained the head of the EIA Siminski Adam (quoted by The Wall Street Journal).

On Wednesday, may futures for Brent traded in the green zone. After yesterday’s decline the price rose again above $40. At 12:39 a barrel of Brent cost $40,26/bbl. This is 1.54% higher than yesterday’s close.

On 7 March, oil prices increased by almost 6%, for the first time this year, trading above $41. Experts attributed the influence of these took place about reducing the number of working rigs and a drop in the level of oil production in the U.S. to its lowest level since November 2014.