Brent price to average $74/bbl in 2025 – EIA
A surge in global oil production is expected to exceed oil demand and keep the price of Brent crude to average around $74/bbl in 2025, the EIA said in its latest oil market report.
PHOTO: Oil barrels. Getty Images
The US Energy Information Administration (EIA) now projects that the Brent spot price will average around $74/bbl in 2025 - unchanged from its previous monthly forecast - and continue to fall by 11% to $66/bbl in 2026.
“We expect downward oil price pressures over much of the next two years, as we expect that global oil production will grow more than global oil demand,” the EIA said.
Front-month ICE Brent fell after the EIA released its oil market report. The report “added to the bearish sentiment by forecasting that global oil production growth will likely exceed demand over the next two years, potentially keeping a lid on oil prices,” remarked SPI Asset Management managing partner Stephen Innes.
The OPEC+ production cuts through the first quarter of this year are expected to result in a drawdown of about 500,000 b/d from the global oil inventory, the energy agency estimated.
“We expect that falling global oil inventories will increase crude oil prices $2/b [$2/bbl] from their December average to an average of $76/b in 1Q25 [$76/bbl in the first quarter of 2025],” the EIA said in its January short-term energy outlook (STEO) report.
Supply and demand estimates
Global liquid fuels and petroleum production is expected to reach about 104.4 million b/d in 2025, the EIA said. Countries that are not part of the OPEC+ agreement will drive global liquid fuels production in 2025, it added. Production growth from non-OPEC+ countries, including the US, Canada, Guyana and Brazil, will be the main drivers of growth.
US crude oil production is expected to reach 13.5 million b/d in 2025, after hitting an annual record of 13.2 million b/d in 2024, the EIA said.
The US energy agency forecasts global liquid fuel demand to average 104.1 million b/d in 2025, down by about 200,000 b/d from its previous forecast.
“Much of this growth is in Asia, where India is now the leading source of global oil demand growth in our forecast,” the EIA said. India’s liquid fuels consumption is expected to grow by 300,000 b/d in both 2025 and 2026, driven by rising demand for transportation fuels, it added.
Global oil demand growth in China is expected to get a boost as economic stimulus efforts taken by the country come into effect this year, the EIA said. China’s oil consumption is expected to grow by 200,000 b/d in 2025 and 2026.
By Aparupa Mazumder
Please get in touch with comments or additional info to news@engine.online
