U.S. Revises Upward Oil Price Forecast for the Year

The U.S. Energy Information Administration (EIA) has revised its forecast for oil prices upward for this year, citing a decline in global petroleum stocks as the rationale behind the adjustment.

According to the “March 2024 Short-Term Energy Outlook Report” by the EIA, it is anticipated that the extension of supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producing countries forming the OPEC+ group will tighten global petroleum supply in the short term.

Due to the tightening supply, it is projected that global petroleum stocks will decrease by an average of 900,000 barrels per day in the second quarter of the year, exerting upward pressure on oil prices.

Consequently, the average barrel price of Brent crude oil, the international benchmark, is expected to reach $87 this year. This figure represents an increase from the previous forecast of $82.42 per barrel.

The average barrel price of West Texas Intermediate (WTI) crude oil is also expected to be $82.15, up from the previous estimate of $77.68 per barrel.

For the upcoming year, the EIA has maintained its forecast for Brent crude oil at $84.8 per barrel and for WTI crude oil at $80.3 per barrel.

According to the report, global petroleum demand is expected to increase by approximately 1.4 million barrels per day this year and next year. The magnitude of this demand increase, whether higher or lower, is noted to have an impact on global petroleum stocks and prices.

Increase in U.S. Crude Oil Production

It is anticipated that the average daily crude oil production in the United States will be approximately 13.19 million barrels this year. Last year, this figure stood at around 12.93 million barrels. By 2025, production is projected to rise to 13.65 million barrels per day.

In the previous report released last month, these figures were estimated at 13.1 million barrels per day for this year and 13.49 million barrels per day for next year.

Global petroleum supply is forecasted to be 102.17 million barrels per day this year and 104.17 million barrels per day next year.

Meanwhile, global petroleum consumption is expected to be 102.43 million barrels per day this year and 103.81 million barrels per day next year.

source: prepared by Melisa Beğiç

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