EIA sees Brent rising by $3/bbl

The US Energy Information Administration (EIA) has forecast the Brent spot price to average $81/bbl by the end of 2023, which is around $3/bbl higher than in its last outlook.

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The EIA expects global oil inventories to decline over the next five quarters, and the Brent spot price to average an even higher $84/bbl next year.

Ongoing concerns over a weak global economy have countered previous optimism over global oil demand growth, said the energy agency. However, with the recent supply cuts by OPEC+ being extended through August, it expects global oil demand to rise over the rest of 2023 and early 2024, with tighter near-term oil supplies as a result.

Supply and demand outlook

Despite the efforts of OPEC+ nations to limit crude oil supply, global liquid fuels production is set to increase by 1.25 million b/d from last year to 101.10 million b/d this year, forecasts the agency, citing growth from non-OPEC producers including the US, Norway, Canada, Brazil and Guyana.

“We expect Russia’s production will decline between 200,000 b/d and 300,000 b/d on average this year,” the EIA. The agency further expects total core-OPEC oil production to fall by 600,000 b/d in 2023, primarily because of the extended production cuts through August announced by Saudi Arabia.

Meanwhile, the EIA expects global liquid fuels consumption to increase by 1.76 million b/d to a record 101.16 million b/d this year, and by an additional 1.64 million b/d in 2024. Most of this growth in demand comes from non-OECD countries, led by China and India.

“We expect China’s liquid fuels consumption will rise by 800,000 b/d in 2023 and by 400,000 million b/d in 2024,” EIA said in its report. The EIA also raised its forecast for India’s liquid fuels consumption by an average of 300,000 b/d for both 2023 and 2024.

By Aparupa Mazumder 

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