The U.S. Energy Information Administration (EIA) has revised its projections for global oil market dynamics in 2024, anticipating slower growth in oil demand and faster expansion in output, leading to a more balanced market.
According to the EIA’s latest Short-Term Energy Outlook (STEO) report, global oil and liquid fuels consumption is now expected to grow by 920,000 barrels per day (bpd) this year, slightly lower than the previous forecast of 950,000 bpd. This reduction in demand growth is attributed to a downward revision of expectations for developed economies.
On the supply side, the EIA has increased its forecast for total world crude oil and liquid fuels production, which is now expected to rise by 970,000 bpd to 102.76 million bpd in 2024, compared to the previous estimate of an 850,000-bpd increase.
The improving market balance has also led the EIA to lower its oil price forecasts for the remainder of the year. Spot Brent crude prices are now expected to average $90 per barrel in the third quarter and $88.67 in the fourth quarter, down from the previous forecast of over $91 and $89, respectively.
For the United States, the world’s top oil producer, the EIA has slightly reduced its production forecast for this year to 13.20 million bpd, still a record high but slightly below the previous estimate of 13.21 million bpd. However, the agency expects a slightly bigger record high of 13.73 million bpd in 2024, up from the prior forecast of 13.72 million bpd.
The EIA also anticipates that some producers in OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, may limit their production after the current voluntary output cuts expire at the end of June. The group’s next meeting is scheduled for June 1, where they may discuss the possibility of extending the cuts if demand fails to pick up as expected.