Crude oil price outlook in 2011 – EIA report

The EIA has published its 2011 crude oil outlook, including a crude oil price outlook. According to the report, expects crude oil price (WTI spot) in 2011, on average, to be 93 USD/b, which is 14$/b higher than the average price in 2010, or an over 17% increase.

Since crude oil price finished 2010 at roughly 91$/b, which similar to the current price level, this implies that EIA doesn’t except much volatility from WTI spot price, nor a major price hike.

Having said that, the EIA explains its uncertainty in crude oil price (what else is new…) in 2011 because of the uncertainty in the production growth on non-OPEC members, which could show a slow down in in 2011 compare to 2010.

In 2010 the growth rate of non-OPEC production was a bit over 1%, compare to an increase of a little over 0.6% in 2009. In 2011, the EIA estimates this growth rate to be only 0.2%.

The EIA lists the countries it expects to increase their production by an average 120,000 to 150,000 bbl/d from 2010 to 2012. These countries include China, Brazil and Canada; and the EIA predicts a smaller rise (less than half) in production for Colombia, Vietnam, and Kazakhstan.

On the other hand, the EIA expects that Russia’s production will decrease by 40,000 bbl/d in 2011.

The EIA also expects the U.S. to slowdown its production growth. It estimates the production will incline from 5.51 million bbl/d in 2010 to 5.66 million bbl/d in 2011 – a 150,000 bbl/d.

By the way, I have written on this subject in the past and presented my take on crude oil price outlook in 2011.

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