EIA hikes Brent price forecast as crude supplies seen slowing
Quantum Commodity Intelligence – The Energy Information Administration (EIA) has lifted its oil price forecast for this year and next after OPEC+ extended output cuts into Q2, while the US agency also sees lower inventories and slower supply growth.
The EIA expects global benchmark Brent to average $87/b in 2024 compared to the previous month's forecast of $82/b, and also nearly $5/b over spot prices at the time of the report, which was released late Tuesday.
The government agency also upped its 2025 forecast to $85/b, compared $79/b last month, while near-term forecasts were also lifted in its latest edition of the monthly Short Term Energy Outlook (STEO).
"As a result of OPEC+ extending crude oil production cuts, we have reduced our forecast for global oil production growth in 2024."
"The lower growth contributes to significant global oil inventory declines in our forecast for the second quarter of 2024. We now expect the Brent crude oil spot price will average $88/b in Q2 2024, up $4/b from our February STEO."
Production
After reaching a record 13.3 million bpd in November and December of 2023, the EIA sees further supply growth this year and next, but at a much slower pace.
Production increased by more than 1 million bpd in 2023 to an average of 12.93 million bpd, while it is forecasting volumes to average 13.19 million bpd this year and 13.65 million bpd in 2025.
But so far 2024 has got off to a slow start after winter storms hit output in January and February, with average production dipping to 12.62 million bpd and 13.07 million bpd, respectively.
On the demand side, the EIA said world consumption was set to grow 1.43 million bpd year-on-year, up 10,000 bpd from its previous forecast but much closer to the International Energy Agency's outlook, rather than OPEC's bullish forecast for more than 2 million bpd of demand growth.
