The global benchmark price of crude oil will fall through the end of 2013, as the United States continues to pump more oil and cut its need for imports, the federal Energy Information Administration forecast in a report this week.
The price decline would reverse oil’s trend during the first half of the year. Brent crude averaged $108 per barrel in July, compared to a second-quarter average of less than $103 per barrel. Unplanned disruptions of the crude supply, including pipeline attacks in Iraq and labor protests in Libya, have put pressure on the price in recent months, along with growing oil demand from refineries, according to the EIA.
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Unexpected events reduced oil production by 2.7 million barrels per day in July, the largest such drop since January 2009, the agency said. Meanwhile, the amount of crude processed by refineries worldwide grew to 78.3 million barrels per day in July, compared to a second-quarter average of 74.8 million barrels per day.
However, EIA projects that demand will decline during the fall, with refineries worldwide running about 76.2 million barrels of crude per day in September and 75.9 million barrels per day in October.
That, along with the United States’ growing domestic supply, will drop the Brent crude price to an average $104 per barrel in September and $102 in the fourth quarter of 2013.
Oil production in the United States has soared to the highest rate since 1992, cutting the world’s largest oil consumer’s need for oil imports by more than 20 percent since 2007.
The EIA forecasts that non-OPEC countries will produce 55 million barrels per day during the fourth quarter of the year, up 1.3 million barrels per day from the second quarter.
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