EIA expects higher oil prices for 2H23

In its September Short-Term Energy Outlook (STEO), EIA forecasts the Brent crude oil price will average US$93/bbl in the Q423, up from its August 2023 forecast of less than US$88/bbl.

Oil production cuts from OPEC+ members, including Saudi Arabia’s recently announced extension of additional voluntary production cuts, contribute to EIA’s forecasts for decreasing supplies.

“We expect crude oil prices to rise as global oil inventories decrease through the end of this year,” said EIA Administrator, Joe DeCarolis. “High oil prices combined with uncertain economic conditions could lessen global demand for petroleum products through 2024.”

Even as OPEC+ continues limiting oil production, EIA expects global production of liquid fuels to continue increasing in 2023 and 2024 due to production growth in non-OPEC+ countries.

EIA expects the US regular-grade gasoline price to average US$3.69/gal in Q423, up from its August 2023 forecast of US$3.57/gal. The revised forecast is largely the result of higher crude oil prices, which are the primary component of gasoline prices.

EIA also lowered its forecast for domestic gasoline consumption following a revision by the US Census Bureau to its US population estimates, which, in turn, reduced EIA’s estimates of how many miles US motorists are driving. EIA expects US gasoline consumption to average 8.9 million bpd in 2023, down slightly from its August 2023 forecasts.

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