Recently, the U.S. Energy Information Administration (EIA) released its monthly Short-term Energy Outlook (STEO), which lowered its forecast for global oil demand growth this year and raised its previous forecast for production growth. Accordingly, the EIA said the oil market is becoming more balanced.

The EIA this time raised its production forecast outside the Organization of Petroleum Exporting Countries (OPEC) countries and lowered its demand forecast for advanced economies. EIA expects global oil and liquid fuel consumption to reach 102.84 million barrels per day this year, an increase of 920,000 barrels per day. It also lowered its forecast for an increase of 950,000 barrels per day in April. It is also expected that oil production this year will reach 102.76 million barrels per day, an increase of 970,000 barrels per day. The previous forecast was for an increase of 850,000 barrels per day.

In addition, as market balance has improved, EIA has also lowered its crude oil price forecast for the year. EIA predicts that the spot price of North Sea Brent crude oil will average US$90/barrel in the third quarter and will fall to US$88.67/barrel in the fourth quarter. The previous forecast was that oil prices would exceed US$91/barrel in the third quarter and US$89/barrel in the fourth quarter.