The U.S. Energy Information Administration (EIA) has revised its estimates for U.S. crude oil output and price forecasts for 2024. According to the latest report released on Tuesday, U.S. crude oil production is projected to increase by approximately 280,000 barrels per day (bpd) in 2024, reaching 13.21 million bpd. This represents a slight uptick from earlier projections. The EIA anticipates further growth in crude oil production in 2025, with output expected to rise by 510,000 bpd to 13.72 million bpd.
The agency attributes the increase in production forecasts to the assumption of higher oil prices. UBS analyst Giovanni Staunovo noted that the rise in output estimates is likely influenced by the expected price trends in the market.
In terms of price forecasts, the EIA now expects Brent crude oil prices to average $88.55 a barrel in 2024, up from its previous forecast of $87. Meanwhile, U.S. West Texas Intermediate crude prices are projected to average $83.78 a barrel this year, compared to the earlier estimate of $82.15.
The EIA’s monthly short-term energy outlook also highlighted strong global oil inventory draws in the current quarter and ongoing geopolitical risks as factors contributing to the price revisions. Brent crude futures traded above $89 a barrel, while WTI futures traded north of $85 on Tuesday, marking significant increases compared to the beginning of the year.
Additionally, the EIA acknowledged that it had underestimated global oil demand over the past two years. The agency now estimates world oil and liquid fuels consumption to be around 99.94 million bpd in 2022, surpassing its prior forecasts by 790,000 bpd. Projections for 2023 and 2024 were also revised upwards, with global consumption expected to reach 101.96 million bpd and 102.91 million bpd, respectively.