Brent prices to touch $85/bbl by March on declining global oil inventories - EIA
The US Energy Information Administration (EIA) forecasts the annual Brent spot price to average about $82/bbl in 2024, indicating a downward revision of $1/bbl from its December outlook.
PHOTO: Crude oil barrels. Getty Images
In its January short-term energy outlook report, the US energy agency forecasts a decrease in global oil inventories in the first quarter of this year, which could push Brent prices to an average of $85/bbl in March 2024. However, inventories are expected to rise next year, potentially exerting downward pressure on Brent prices in the latter part of this year and early 2025, it added.
“As a result, the average Brent crude oil price falls to $81/b [$81/bbl] in December 2024 and falls below $80/b [$80/bbl] in 2H25 [second half of 2025],” it noted.
OPEC+ production cuts are expected to lead global oil inventories to decline by an additional 800,000 b/d on average in the first quarter of 2024.
“We expect some voluntary production cuts from Saudi Arabia and other OPEC+ countries will continue into 2025 in an effort to offset forecast production growth from outside the group of 0.9 million b/d [900,000 b/d] in 2025, the EIA said.
The US energy agency also stated that heightened tensions in the southern part of the Red Sea, coupled with other geopolitical risks in the Middle East “have the potential to disrupt global oil trade flows and drive up global oil prices further should they escalate or persist.”
Supply and demand outlook
The EIA anticipates a growth of 1.4 million b/d in global liquid fuels demand in 2024, with a significant portion of this growth coming from non-OECD regions in Asia, particularly led by China and India.
Global consumption of liquid fuels will be over 103.5 million b/d in 2025, the EIA further projected.
The agency projects that US crude oil production will achieve new records, touching 13.2 million b/d in 2024 and surpassing 13.4 million b/d in 2025.
However, the EIA expects global liquid fuels production growth in 2024 to remain slow “as OPEC+ continues its policy of production restraint.”
By Aparupa Mazumder
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