The US Energy Information Administration (EIA) significantly revised up the price of Brent crude for the remainder of this year in its Short-Term Energy Outlook (STEO) released late Tuesday.
Brent crude was raised to $82.62 per barrel by the EIA, while the American standard, West Texas Intermediate (WTI), was raised to $77.79 per barrel. These figures were $79.54 and $74.61 in the previous month's report.
For next year, the agency expects the price of Brent crude to average $86.48 per barrel and WTI to average $81.48 per barrel.
Extended voluntary cuts to Saudi Arabia's crude oil production and expectations of higher global demand were attributed to the price increases.
The EIA expects the production cuts, combined with increasing demand, to cause a fall in global oil inventories, putting upward pressure on oil prices until the end of this year.
The report also noted that global oil inventories are expected to transition from a period of inventory builds in the first half of this year to inventory draws through the end of the year, again placing upward pressure on global oil prices.
Global oil inventories increased by an average of 600,000 barrels per day (bpd) in the first half of 2023, and the EIA forecasts they will decrease by an average of 400,000 bpd in the second half of the year.
The agency also predicts slight inventory builds in 2024, which will put some downward pressure on prices next year.
-US crude oil production increases
Crude oil output in the US is predicted to reach an average of 12.8 million bpd this year, up from 11.89 million bpd last year, reflecting the effect of higher well productivity.
Next year, crude oil output in the country is expected to reach 13.09 million bpd.
In OPEC countries, crude oil production is predicted to increase from an average of 28.6 million bpd in 2022 to 28.1 million bpd in 2023 and 28.5 million bpd in 2024.
Likewise, global liquid fuel production is expected to increase from an average of 99.88 million bpd in 2022 to 101.3 million bpd in 2023 and 103 million bpd in 2024.
The increase in production will be driven by growth in non-OPEC countries, particularly in the US, Canada, Brazil and Russia, the EIA noted.
World liquid fuel consumption, meanwhile, is anticipated to increase from an average of 98.6 million bpd in 2022 to 101.2 million bpd in 2023 and 102.8 million bpd in 2024. The increase in consumption is driven by growth in non-OECD countries, particularly in Asia, the Middle East and Africa.
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr