US revises oil price forecast upwards

The US Energy Information Administration (EIA), the Organization of the Petroleum Exporting Countries (OPEC) and the OPEC+ group, which consists of some non-OPEC producing countries, revised their oil price forecast upwards. Brent oil for this year and next, citing production cuts from OPEC+ member countries.

In the EIA’s “June 2023 Near-Term Energy Outlook Report”, OPEC+ member countries extended their daily production cuts into next year in line with the decision taken in early June, with Saudi Arabia announcing that it would make an additional cut of 1 million barrels per day in July, at the end of this year and the first of next. It was stated that the upward pressure on oil prices increased in the second half of the year.

In this context, the average price of a barrel of Brent crude for this year was estimated at $79.54. This figure was $78.65 in the previous report.

The price of West Texas Intermediate (WTI) crude oil a barrel is forecast to be $74.61 this year. The WTI price per barrel was estimated at $73.62 in the previous report.

Next year, the Brent crude oil price per barrel is expected to be $83.51, while the WTI crude oil price is expected to be $78.51 per barrel.

CRUDE OIL PRODUCTION IS EXPECTED TO INCREASE

Average daily crude oil production in the US is expected to be around 12,610,000 barrels this year. Last year, this figure was recorded at approximately 11 million 890 thousand barrels. Production is estimated to increase to 12,770,000 barrels in 2024.

The report indicated that US crude oil production will reach record levels this year and next, but the growth rate of domestic production will slow due to rising production costs and companies investing less in new production to increase their profit margins.

It is estimated that the world supply of oil will be 101 million 370 thousand barrels per day this year and 102 million 690 thousand barrels next year.

World oil production is expected to increase this year and next despite the OPEC+ group’s production cuts, and this increase is expected to come mostly from non-OPEC countries.

RECORD CONSUMPTION IS EXPECTED

World oil demand is expected to be 101 million 10 thousand barrels per day this year and 102 million 710 thousand barrels next year. The expected increase in global consumption for the remainder of the year and this year is expected to come from non-OECD Asian countries, led by China and India. It is estimated that the consumption of liquid fuels such as gasoline and jet fuel in these countries will reach record levels this year and next.

EIA Manager Joe DeCarolis, whose views are included in the report, stressed that the record increase in oil products production reflects the expectation of increased demand, saying that uncertainties on the supply side and the Demand continues in the markets. (AA)