The U.S. said Tuesday it expected crude oil output from OPEC to stay flat in the second-quarter, averaging 28.5 million barrels a day.
The Organization of Petroleum Exporting Countries has largely made good on the pledge it made last year to cut oil production by 4.2 million barrels a day. Many market participants credit this move for drawing a line under oil prices, which have plunged from levels north of $145 a barrel last year to about $50 today. Any further recovery in prices, which have climbed back after trading below $40 earlier this year, will depend on an economy recovery, which would drive fuel consumption, the U.S. Energy Information Administration said in its monthly outlook.
"The timing and pace of the global economic recovery will determine whether the higher crude oil prices seen during March are sustainable," the EIA, a part of the Department of Energy, said in its Short-Term Energy Outlook. "The prospects of limited growth in non-OPEC production and the expected start of economic recovery later this year that should increase oil consumption and the demand for OPEC oil, are the main factors supporting the upward price path."
The EIA sees output from OPEC rising to 29.2 million barrels a day in the fourth quarter, resulting in average production of 28.8 million barrels a day for the year.
At its last meeting, OPEC stood pat on its production quotas, citing the need for some members of the group to improve compliance and some concerns that a further reduction in supplies would hinder efforts to spark economic growth across the world. OPEC's next meeting is scheduled for May 28.