The US Energy Information Administration (EIA) kept its forecast for oil price growth unchanged for 2024, citing a decline in global oil inventories over the next five quarters.
International benchmark Brent crude will gradually increase over the coming months, reflecting expectations of a drop in global oil inventories, according to the EIA's Short-Term Energy Outlook (STEO) released late Tuesday.
Brent crude is expected to rise to $81 per barrel by the end of the year due to rising demand and supply cuts by the OPEC+ group.
'The reduction in expected near-term oil supplies was the result of the OPEC+ extended crude oil production cuts announced on June 4 and an extension of voluntary cuts through August announced by Saudi Arabia on July 3,' the report said.
It added that global oil inventories will also transition from inventory builds, on average, during the first half of 2023 to consistent inventory draws until the fourth quarter of 2024 with this transition, placing upward pressure on global oil prices over the forecast period.
While inventories increased on average by 0.6 million barrels per day (bpd) in the first half of this year, it is forecast that they will decrease by an average of 0.7 million bpd for the remainder of the year.
Inventories continue to fall by an average of 0.4 million bpd in the first three quarters of 2024 before increasing by 0.1 million bpd in the fourth quarter next year, according to the agency.
The EIA now forecasts that Brent crude will average $79.34 per barrel this year, while the American benchmark, West Texas Intermediate (WTI), will average $74.43 per barrel.
For next year, the agency expects the price of Brent crude to average $83.51 per barrel and WTI to average $78.51 per barrel.
- US crude oil production increases
Despite the OPEC+ production cut extension and Saudi Arabia and Russia's additional cuts, the agency predicts an increase in global liquid fuel production of 1.2 million bpd in 2023, primarily because of growth from non-OPEC producers. Among the leading sources of non-OPEC growth are the US, Norway, Canada, Brazil and Guyana.
However, the organization estimates that global liquid fuel production will expand by 1.5 million bpd next year, led by OPEC production growth.
According to the report, global production will average 101.1 million bpd in 2023 and 102.57 million bpd in 2024.
Crude oil output in the US is predicted to reach an average of 12.56 million bpd this year, up from 11.89 million bpd last year. Next year, crude oil output in the country is expected to reach 12.85 million bpd.
- China and India to lead demand growth
Global oil demand is predicted to reach 101.16 million bpd in 2023 and 102.8 million bpd next year.
Non-OECD Asia, led by China and India, is responsible for most of the expected growth in liquid fuel demand. China's liquid fuel consumption will rise by 0.8 million bpd in 2023 and by 0.4 million bpd in 2024. India's liquid fuel consumption is expected to increase by an average of 0.3 million bpd in both 2023 and 2024, according to the EIA.
By Firdevs Yuksel
Anadolu Agency
energy@aa.com.