EIA’s Short-Term Oil Price and Production Outlook

• Brent crude oil spot price averaged $83 per barrel in February, up $3/b from January due to uncertainties and increased risk around attacks on commercial ships in the Red Sea and an anticipated extension of voluntary OPEC+ production cuts.
• The OPEC+ voluntary production cuts were extended through the second quarter of 2024, with an additional voluntary production cut from Russia, leading to expectations of tighter global oil supplies in the near term.
• The extension of OPEC+ production cuts is expected to result in a decrease of global oil inventories by 0.9 million barrels per day (b/d) in 2Q24, contrary to the previous forecast of relatively unchanged inventories.
• Brent crude oil price is forecasted to average $88/b in 2Q24, $4/b higher than the previous estimate, remaining relatively flat for the rest of 2024 before experiencing slight downward pressure in 2025 due to increasing inventories when OPEC+ supply cuts expire.
• Global oil demand is projected to grow by 1.4 million b/d in both 2024 and 2025, impacting global inventory levels and oil prices.
• With the incorporation of new OPEC+ voluntary production cuts, global liquid fuels production is expected to increase by 0.4 million b/d in 2024, primarily driven by growth outside of OPEC+, notably in the Americas.
• In 2025, global liquids fuel production is forecasted to increase by 2.0 million b/d, with an increase in OPEC+ crude oil production and production not subject to the OPEC+ agreement.

(Source: EIA)