Brent climbs as EIA forecasts tighter oil supply this year
Front-month ICE Brent has gained by $1.01/bbl on the day, to $85.71/bbl at 09.00 GMT.
PHOTO: Getty Images
Upward pressure:
The US Energy Information Administration (EIA) has forecast crude oil production from OPEC members to average at 33.7 million b/d this year. This is down by 400,000 b/d from its previous forecast.
The EIA has also lowered its global liquid fuel production forecast by 300,000 b/d from its March forecast. Global liquid fuel production is now projected to rise from 100 million b/d in 2022, to 101.3 million b/d this year.
The US energy info provider forecasts the Brent spot price to average $85/bbl this year - an upward revision of $3/bbl from its March outlook. Similarly, it has raised its 2024 Brent price forecast by nearly $4/bbl to $81/bbl.
“The oil market is going to remain tight and while China’s reopening has underwhelmed, they will do a lot better going forward and that should keep prices supported,” OANDA senior market analyst Ed Moya has said.
Downward pressure:
On the flip side, the EIA has said that “increasing risks in the US and global banking sectors increases uncertainty about macroeconomic conditions” and that can lead to a potential decline in global oil demand this year.
“The [global economic] outlook is uncertain again amid financial sector turmoil, high inflation, ongoing effects of Russia’s invasion of Ukraine, and three years of COVID,” says the International Monetary Fund in the latest World Economic Outlook report. It has downgraded this year’s global GDP outlook by 0.1% to 2.8% percent.
By Konica Bhatt
Please get in touch with comments or additional info to news@engine.online
