In its June short-term energy outlook, EIA has also increased its forecast for the Brent spot price for 2024 by $9/bbl to $84/bbl.

Saudi Arabia – and to some extent the wider OPEC+ group – has sought to prop up crude prices by committing to near-term and longer-term output cuts at the OPEC+ meeting on 4 June. EIA expects these draws to put some upward pressure on crude oil prices in late-2023 and early-2024.

“The OPEC+ cuts result in inventory draws in our forecast, which in turn trigger higher crude oil prices, mainly in 2024,” said the agency. Meanwhile, crude oil prices declined in May due to uncertainty about economic conditions, which triggered concerns about global oil demand growth.

Demand and supply outlook

Global crude oil production will decline from the third quarter of this year through the third quarter of next year, the agency has forecast, citing the recent OPEC+ announcement to extend production cuts through 2024.

“We forecast that OPEC crude oil production will fall by 0.6 million b/d in 2023 and then increase by 0.3 million b/d in 2024,” EIA said in the report. These forecasts come on the back of Saudi Arabia’s recent announcement of a voluntary production cut of 1 million b/d from July.

Despite the extension of OPEC+ production cuts, EIA expects global liquid fuels production to increase by 1.5 million b/d in 2023 and by 1.3 million b/d in 2024, primarily because of growth from non-OPEC producers like the US, Norway, Canada, Brazil, and Guyana.

Meanwhile, it expects global liquid fuel consumption to increase by 1.6 million b/d in 2023 from an average of 99.4 million b/d in 2022, and by an additional 1.7 million b/d in 2024. The consumption growth in EIA’s forecast comes mainly from non-OECD countries.
Source: Engine