NEW YORK: Crude oil prices in 2016 could be $5 to $15 a barrel lower than forecast if and when oil-related sanctions against Iran are lifted, the US government said.
The remarks, part of the US Energy Information Administration’s monthly short-term energy outlook, cite that Iran is believed to hold at least 30 million barrels in storage and that the nation could ramp up crude production by at least 700,000 barrels per day (bpd) by the end of 2016.
Meanwhile, the EIA also lowered its expected US crude oil production growth forecast for 2015 and 2016. Its 2015 growth forecast fell to 550,000 bpd from 700,000 bpd, while the 2016 growth forecast was lowered to 80,000 bpd vs 140,000 bpd previously.
Oil futures rallied on Tuesday.
US May crude was up $1.65 at $53.79 a barrel at 12:58 p.m. EDT (1658 GMT), having traded from $51.17 to $53.84.
Brent May crude was up $1.10 at $59.22, having swung from $57.02 to $59.27.
Oil could be $5-$15 lower in 2016 if Iran sanctions lifted: EIA
