EIA expects relatively flat crude oil prices in 2024 and 2025

The EIA expects the Brent crude oil price will average US$82/bbl in 2024 and US$79/bbl in 2025, compared with its 2023 average of US$82/bbl. The EIA expects that the price of West Texas Intermediate (WTI) will be slightly lower but generally follow the same path.

In 1Q24, crude oil prices are expected to rise somewhat, driven by OPEC+ production cuts leading to global stock draws of 810 000 bpd. As a result of the stock draws, the EIA forecast the price of Brent will increase from US$78/bbl in December 2023 to US$85/bbl in March 2024. The EIA expects that crude oil prices will gradually decrease after April 2024 with minor stock builds because global production increases more than consumption. It forecasts stocks will increase by 110 000 bpd from 2Q24 through 4Q24 and by 280 000 bpd in 2025.

The EIA attributes the relatively small crude oil price changes in its forecast to continued reduced OPEC+ production. It forecasst OPEC+ crude oil production will drop from 37.1 million bpd in 2023 to 36.4 million bpd in 2024. In 2025, the EIA expects OPEC+ crude oil production to increase, averaging 37.2 million bpd. These values do not include Angola, which left OPEC in January 2024.

The latest OPEC+ agreement, announced on 30 November 2023, included 2.2 million bpd of new voluntary cuts to its crude oil production target through March 2024. These cuts are in addition to existing voluntary cuts and lower production targets determined at its June 2023 meeting. The EIA expects OPEC+ will produce less than its currently stated targets in 2024.

Non-OPEC+ countries, those countries not in or affiliated with OPEC agreements, produced an estimated 52 million bpd of petroleum liquids in 2023. The EIA expects non-OPEC+ production to average 53 million bpd in 2024 and 53.9 million b/d in 2025. We expect that non-OPEC+ production growth will be driven by US production increasing by 0.4 million bpd in both 2024 and 2025.

The growth of global petroleum consumption over the past two years was driven by economic growth and a return to pre-pandemic travel patterns, especially for international flights. The EIA forecasts global petroleum consumption to increase by 1.4 million bpd in 2024 and 1.2 million bpd in 2025, both of which are slightly less than the 10-year pre-pandemic average (2010 – 19).

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