The U.S. Energy Department increased crude-oil price projections for 2013 and forecast that global consumption will climb to a record.
West Texas Intermediate oil will average $89.54 a barrel this year, up 1.3 percent from the December projection of $88.38, the department said today in its monthly Short-Term Energy Outlook. The U.S. benchmark grade averaged $94.12 in 2012, less than the December estimate of $94.26.
Brent, the benchmark grade for more than half the world’s crude, will average $105.17 a barrel in 2013, up 1.4 percent from last month’s forecast. The average cost of domestic and imported grades used by U.S. refiners will be $94.27 a barrel in 2013, up 1.2 percent from the December projection of $93.11.
WTI will climb to an average $91 a barrel next year, while Brent will slip to $99.25 according to the report. This is the first edition of the outlook to have 2014 forecasts.
The spread between Brent and WTI, which will average $15.63 a barrel this year, will narrow to $8.25 in 2014. The Brent premium will shrink because increasing pipeline capacity will lower the cost of shipping oil from the central U.S. to refineries on the Gulf Coast, according to the report.
The department increased its forecast for global oil consumption this year to 90.11 million barrels a day from 90 million estimated last month. Demand will be 1.1 percent higher than last year’s average of 89.17 million. Global consumption will climb to 91.46 million in 2014.
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