EIA Raises Brent Spot Price Forecast

The Energy Information Administration raised its outlook for Brent crude oil spot prices for this year and next, according to the agency’s Short Term Energy Outlook published on Tuesday.

The EIA sees Brent crude oil prices averaging $82.62 per barrel this year—an upward revision of some $4 per barrel, the STEO showed. For next year, the EIA predicts Brent will average $86.48 per barrel, an upward revision of some $2 per barrel, or 3.6%.

For August, the EIA sees Brent crude averaging $85 per barrel.

“Crude oil prices have increased since June, primarily because of extended voluntary cuts to Saudi Arabia’s crude oil production and increasing global demand. We expect these factors will continue to reduce global oil inventories and put upward pressure on oil prices in the coming months, with the Brent price averaging $86/b in the second half of 2023 (2H23), up about $7/b from our July Short-Term Energy Outlook (STEO) forecast for the same period,” the EIA said in its latest forecast.

Rising global oil production anticipated next year is expected to keep up with oil demand, keeping some downward pressure on prices in Q2 2024.

The EIA sees crude oil production in the United States averaging 12.8 million barrels per day this year, and 13.1 million bpd next year, beating annual records on the back of expectations for higher well-level productivity and higher crude prices. U.S. crude oil production in 2922 averaged 11.91 million bpd.

Global oil production is expected to increase by 1.4 million bpd this year, with non-OPEC production expected to increase by 2.1 million bpd. Next year, the EIA is forecasting a 1.7 million bpd rise in global crude oil production.

Brent crude prices averaged $100.94 last year, and $70.89 in 2021, EIA data shows.

By Julianne Geiger for Oilprice.com

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