In its latest Short-Term Energy Outlook (STEO), the US Energy Information Administration (EIA) has adjusted its projections for crude oil prices upwards, citing persistent global oil inventory withdrawals as the driving force behind the increase.
Released recently, the STEO predicts that Brent crude oil prices will average $89 per barrel in the second half of 2024, up from $84 per barrel in the first half of the year. According to the report, these higher prices are a direct result of anticipated ongoing reductions in global oil inventories.
The EIA’s analysis indicates that global oil inventories saw a decline of 500,000 barrels per day (bpd) in the first half of 2024, with an expected further decrease of 700,000 bpd in the latter half of the year. This reduction, the agency explains, is partly attributable to continued production cuts by OPEC+, which announced maintenance of current levels until at least the end of September.
Looking ahead, the EIA forecasts Brent crude to reach approximately $86.37 per barrel, while American West Texas Intermediate (WTI) is projected to average around $82.03 per barrel in 2024. These figures mark an increase from the previous month’s estimates of $84.15 and $79.70, respectively.
For 2025, the agency anticipates Brent crude to average $88.38 per barrel and WTI to average $83.88 per barrel.
US Crude Oil Production Estimates Upgraded
In addition to revising its price forecasts, the EIA has also revised upwards its projections for US crude oil production. Expected to average 13.25 million bpd in 2024, up from 12.93 million bpd last year, this represents an upward adjustment of approximately 10,000 bpd from the previous month’s forecast.
Looking further ahead to 2025, US crude oil output is forecasted to rise to 13.77 million bpd, reflecting an increase of approximately 60,000 bpd compared to last month’s projections.
Globally, the EIA estimates that average oil production will amount to 102.43 million bpd by the end of 2024 and rise to 104.6 million bpd in 2025.
Global Oil Demand and Outlook
Global oil demand is expected to reach 102.91 million bpd in 2024, with a projected increase to around 104.68 million bpd in 2025, according to the EIA’s forecasts.
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