USA EIA Lowers Brent Oil Price Forecast for 2024 and 2025
by Andreas Exarheas
click here to read the original article at Rigzone.com
*this article was not written by Roseland Oil & Gas
In its latest short term energy outlook (STEO), the U.S. Energy Information Administration (EIA) lowered its Brent spot average price forecast for 2024 and 2025.
The EIA now sees the Brent spot price averaging $84.44 per barrel this year and $85.71 per barrel next year. In its previous July STEO, the EIA projected that the Brent spot price would average $86.37 per barrel in 2024 and $88.38 per barrel in 2025.
A quarterly breakdown in the latest STEO shows that the EIA expects the Brent spot price to average $84.06 per barrel in the third quarter, $85.97 per barrel in the fourth quarter, $88.66 per barrel in the first quarter of 2025, $86.33 per barrel in the second quarter, $85 per barrel in the third quarter, and $83 per barrel in the fourth quarter.
In its previous STEO, the EIA forecast that the Brent spot price would average $87.97 per barrel in the third quarter, $89.64 per barrel in the fourth quarter, $90.66 per barrel in the first quarter of next year, $89 per barrel in the second quarter, $88 per barrel in the third quarter, and $86 per barrel in the fourth quarter.
“The Brent crude oil spot price averaged $85 per barrel in July, up $3 per barrel from the average in June,” the EIA stated in its August STEO.
“Although the monthly average Brent spot price was higher in July, daily spot prices fell toward the end of the month driven in part by signals that global economic conditions may be slowing, which has the potential to reduce global oil demand growth,” it added.
“Although market concerns about the economy have lowered crude oil prices in recent days, we still expect that the most recent round of OPEC+ production cuts will reduce global oil inventories over the next three quarters in our forecast and push oil prices higher,” they continued.
In the STEO, the EIA noted that it expects global oil inventories will decrease by an average of 0.8 million barrels per day in the second half of 2024, “with further declines in 1Q25”.
“We anticipate that the market will gradually return to moderate inventory builds in mid-2025 after the expiration of voluntary OPEC+ supply cuts in 4Q24 and as forecast production growth from countries outside of OPEC+ begins to outweigh global oil demand growth,” the EIA added.
“We estimate that global oil inventories will increase by an average of 0.3 million barrels per day in the second half of 2025,” it continued.
In a report sent to Rigzone this week, Bjarne Schieldrop, the Chief Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), revealed that SEB’s “target is for a Brent crude price of $85 per barrel for 2024”.
“So far it has averaged $83.3 per barrel. Distribution of prices within a year typically varies +/-USD 15 per barrel from the mean. That implies that we should see both $100 per barrel and $70 per barrel,” he added.
“Last year we had a high of $97.7 per barrel and a low of $70.1 per barrel. So far this year we have had a high of $92.2 per barrel and a low of $74.8 per barrel,” he added.
A separate report sent to Rigzone this week by Standard Chartered Bank Commodities Research Head Paul Horsnell showed that the company expects the ICE Brent nearby future crude oil price to average $106 per barrel in the fourth quarter of this year and $109 per barrel overall in 2025.
A research note sent to Rigzone by the JPM Commodities Research team last Friday showed that J.P. Morgan expects the Brent crude price to average $83 per barrel this year and $75 per barrel next year.
In a Rystad Energy oil macro update sent to Rigzone on Tuesday by the Rystad team, Svetlana Tretyakova highlighted that oil prices were “having a volatile start to the week, dropping as low as $75 on Monday, the lowest price since December 2023, before rebounding later in the day”.
“Prices plunged last week as fears of a recession in the U.S. gathered pace and previously bullish investors sold their petroleum positions, but the possibility of supply disruptions in the Middle East are helping to keep prices from falling off a cliff,” Tretyakova added in the update.
by Andreas Exarheas
click here to read the original article at Rigzone.com
*this article was not written by Roseland Oil & Gas