The US Energy Information Administration (EIA) revised down its forecast for crude oil prices through the end of next year over the expectation that global oil demand growth will be lower in 2025.
The Brent crude oil spot price averaged $74 per barrel in September, down $6 per barrel from August, according to the EIA’s Short-Term Energy Outlook (STEO) released Tuesday.
Prices fell in September as concerns over global oil demand growth outweighed declines in oil inventories and OPEC+ members’ decision to delay production increases until December 2024.
However, after the recent escalation in tension in the Middle East, the Brent spot price rose to $79 per barrel on Oct. 4, up 11% from a week earlier.
The potential for further escalation – such as an Israeli response to Iran’s missile attack on Oct. 1- has injected significant uncertainty and volatility into oil markets in recent days, according to the report.
‘Following the September drop in prices and our expectation that oil demand growth will be lower next year than we had previously forecast, we have lowered our forecast for crude oil prices despite increasing oil prices in early October,’ the EIA said.
As a result, the EIA forecasts that average Brent oil prices will be $80.89 per barrel and the American West Texas Intermediate (WTI) will register $76.91 per barrel in 2024. In the previous month’s report, these figures were $82.80 and $78.80, respectively.
For next year, the agency expects Brent crude to average $77.59 per barrel and WTI to average $73.13 per barrel.
– US crude production forecast revised down
Crude oil production in the US is expected to average 13.22 million barrels per day (bpd) in 2024, up from 12.93 million bpd last year. The figure is around 30,000 bpd less than the previous month’s forecast.
Next year, crude oil output in the country is expected to reach 13.54 million bpd, down by about 13,000 bpd from last month’s prediction.
The agency also estimated that average global oil production will be 102.5 million bpd at the end of the year and 104.54 million bpd next year.
Global oil demand, meanwhile, is anticipated to reach 103.06 million bpd in 2024, while demand is expected to be around 104.35 million bpd in 2025.
