The US Energy Information Administration (EIA) significantly revised up the price of Brent crude late Tuesday, citing OPEC+ production cuts.
In its Short-Term Energy Outlook (STEO) released late Tuesday, the EIA revised up the price of Brent crude this year to $79.54 per barrel and the American benchmark, West Texas Intermediate (WTI), to $74.61 per barrel. In the report last month, these figures were $78.65 and $73.62, respectively.
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.
The EIA attributed the price increases to lower global oil production as a result of OPEC+ and Saudi Arabia's announced supply curbs on Sunday.
On June 4, OPEC+ members agreed to extend crude oil production cuts through the end of 2024. The cuts had been set to expire at the end of 2023.
Saudi Arabia also announced a new voluntary oil production cut of 1 million barrels per day (bpd) for July 2023. The EIA forecasts that OPEC crude oil production will fall by 600,000 bpd in 2023 and then rise by 300,000 bpd in 2024.
Despite the OPEC+ extension and Saudi Arabia's additional cuts, the agency predicts an increase in global liquid fuel production of 1.5 million bpd in 2023 and 1.3 million bpd in 2024, primarily because of growth from non-OPEC producers.
Among the leading sources of non-OPEC growth are the US, Norway, Canada, Brazil and Guyana.
-US crude oil production increases
The agency said US crude oil production will set annual record highs in 2023 and 2024, though growth in domestic crude oil production is slowing.
Crude oil output in the US is predicted to reach an average of 12.61 million bpd this year, up from 11.89 million bpd last year.
Next year, crude oil output in the country is expected to reach 12.77 million bpd.
'Slower production growth may reflect a combination of the use of capital to increase dividends and repurchase shares instead of investments in new production; the effects of tighter labor markets and higher costs; and increased pressure on oilfield supply chains,' the agency said.
The EIA Administrator, Joe DeCarolis, pointed to an increase in travel, driving the forecast for record consumption of petroleum products.
'The petroleum market remains highly uncertain, so we will continue monitoring developments and tracking supply and demand dynamics,' DeCarolis said.
OPEC's output for petroleum and other liquid fuels is estimated to average 33.51 million bpd this year and 33.84 million bpd in 2024. The group’s crude oil production will stand at 28.10 million bpd this year and 28.38 million bpd next year.
According to the report, global crude oil production will average 101.37 million bpd in 2023 and 102.69 million bpd in 2024.
The EIA also expects new record highs in the consumption of liquid fuels such as gasoline and jet fuel in 2023 and 2024, largely driven by non-OECD countries, especially China.
Global oil demand is predicted to reach 101.01 million bpd at the end of the year and 102.71 million bpd next year.
By Basak Erkalan and Sibel Morrow
Anadolu Agency
energy@aa.com.tr