The US Energy Information Administration (EIA) revised down the price of Brent crude for 2024 and 2025, citing significant global spare crude oil capacity.
In its Short-Term Energy Outlook (STEO) released on Tuesday, the agency forecast that spare production capacity of producers from the Organization of the Petroleum Exporting Countries (OPEC) will be in the region of 4 million barrels per day (bpd) through 2025.
According to the report, crude oil price volatility, amid voluntary OPEC+ production cuts and ongoing geopolitical risks, has been subdued so far this year with significant spare crude oil production capacity.
The report noted that should holders of spare production capacity choose to deploy it, supply would be made available to the oil market in the event of any short-term supply disruptions.
The EIA forecast that global oil inventories would fall by 300,000 barrels per day (bpd) in the first half of this year.
The agency also predicts a relatively balanced oil market, with some OPEC+ producers continuing production cuts in the second half of 2024.
Thus, the EIA forecasts that Brent will reach $87.79 per barrel and the American West Texas Intermediate (WTI) will hit $83.05 per barrel in 2024. These figures were $88.55 and $83.78, respectively, in the previous month's report.
For next year, the agency expects Brent crude to average $85.38 per barrel and WTI to average $80.88 per barrel.
However, the report highlights that there remains significant uncertainty centered around ongoing developments in the Middle East, which have the potential to increase oil price volatility and lead to sharp oil price increases.
- US crude oil production revised down
Crude oil production in the US is expected to average 13.20 million bpd in 2024, up from 12.93 million bpd last year. The figure is also 10,000 bpd lower than the previous month’s forecast.
Next year, crude oil output in the country is expected to reach 13.73 million bpd, up by 10,000 bpd from last month’s prediction.
The agency also forecasts that global oil production will be 102.76 million bpd at the end of the year and 104.65 million bpd next year.
World oil demand, meanwhile, is anticipated to reach 102.84 million bpd in 2024, while demand is expected to be around 104.26 million bpd in 2025.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr