The US Energy Information Administration (EIA) revised up its forecast for crude oil prices by $2 per barrel through the end of next year due to the expectations of a higher global oil demand growth in 2025.
The Brent crude oil spot price averaged $76 per barrel in November, increasing $2 per barrel from September, according to the EIA's Short-Term Energy Outlook (STEO) released Wednesday.
The IEA identified two primary sources of uncertainty impacting oil prices; ongoing Middle East conflict and the commitment of OPEC+ members to voluntary production cuts.
'First, although the volatility and risk premium associated with the conflict in the Middle East has moderated in recent weeks, the duration and severity of the ongoing conflict remain uncertain, as is the potential for escalation to reduce oil supplies. Second, although we assess that OPEC+ producers will likely continue to limit production below recently announced targets in 2025, the potential for weakening commitment among OPEC+ producers to continue cutting production adds downside risk to oil prices,' the report said.
Prices rose in November as market concerns over Israel’s possible response to the Oct. 1 missile attack on Iran would restrict Iran's oil production capacity or exports.
However, oil prices fell to $71 per barrel as Israel's military response did not target Iran's oil infrastructure, the report said, noting that although the risk premium associated with the conflict in the Middle East has decreased, the situation still has an upward effect on prices.
The average price of a barrel of Brent oil is expected to be at the level of $80.95 this year. This figure was estimated at $80.89 in the previous report.
As a result, the EIA forecasts that average Brent oil prices will be $80.95 per barrel and the American West Texas Intermediate (WTI) will register $77 per barrel in 2024. In the previous month's report, these figures were $80.89 and $76.91, respectively.
For next year, the agency expects Brent crude to average $76.06 per barrel and WTI to average $71.60 per barrel.
- US crude production forecast revised up
Crude oil production in the US is expected to average 13.23 million barrels per day (bpd) in 2024, up from 12.93 million bpd last year. The figure is around 300,000 bpd less than the previous month's forecast.
Next year, crude oil output in the country is expected to reach 13.53 million bpd, down by about 10,000 bpd from last month's prediction.
The agency also estimated that average global oil production will be 102.62 million bpd at the end of the year and 104.66 million bpd next year.
Global oil demand, meanwhile, is anticipated to reach 103.13 million bpd in 2024, while demand is expected to be around 104.35 million bpd in 2025.
By Basak Erkalan
Anadolu Agency
energy@aa.com.tr