Brent price to hit $85-90/bbl by the end of 2024 – EIA

Falling global oil inventories and ongoing OPEC+ cuts are expected to drive the Brent crude spot price from its current level to $85–90/bbl by the end of this year.

PHOTO: Oil barrels. Getty Images

The US Energy Information Administration (EIA) projects that Brent spot will average around $89/bbl in the first quarter of 2025.

Global oil inventories will continue to fall by 800,000 b/d in the second half of 2024 and decline through the first quarter of 2025, as the market recovers from OPEC+ supply cuts, the EIA said in its August short-term energy outlook (STEO) report.

The US-headquartered energy agency projects that the global oil market will return to moderate inventory builds by mid-2025 as OPEC+ gradually rolls back its voluntary cuts and non-OPEC supply increases. Brent’s spot price is expected to average $86/bbl in 2025, it said.

“We estimate that global oil inventories will increase by an average of 0.3 million b/d [300,000 b/d] in the second half of 2025,” the EIA said.  

Supply and demand estimates

Production growth outside of OPEC+ will remain strong in 2025, the EIA said. Global liquid fuels and petroleum production is expected to grow by 600,000 b/d in 2024 to 102.4 million b/d, down from a growth rate of 1.8 million b/d in 2023.

Global liquid fuels output is expected to increase by 2.1 million b/d in 2025, “as the OPEC+ voluntary production cuts unwind throughout the year,” the EIA said. “OPEC+ production increases by 0.7 million b/d [700,000 b/d in 2025], combined with 1.4 million b/d of production growth from countries outside of OPEC+,” it added.

The EIA projects global oil demand to increase by 1.1 million b/d to reach 102.9 million b/d in 2024. The agency expects global oil demand to grow by 1.6 million b/d to 104.5 million b/d in 2025, down by 200,000 b/d from its July forecast.

The reduction in oil demand growth forecast stems from an apparent economic slowdown in China, the EIA said. “Most of the reduction in our oil consumption forecast is in China, where we expect slowing economic growth will continue to reduce diesel consumption.”

Consumption of liquid fuels in China is now expected to grow by about 300,000 b/d in 2024 and 2025, which is lower than the average growth of 500,000 b/d achieved in 2015–2019.

By Aparupa Mazumder

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