New oil price, production, and consumption forecasts for 2023 and 2024 were presented in the latest EIA Short-Term Energy Outlook (STEO). One of the factors in these forecasts is the cut in crude oil production by OPEC member countries, coupled with the increase in oil consumption. OPEC+ had originally announced cuts in crude oil production until December 2023, but on June 4, they announced that these cuts will be extended until the end of 2024. In addition, the large producer Saudi Arabia announced a voluntary cut of 1.0 million b/d for July and August 2023.
OIL PRICE
The Brent crude oil price forecast will rise to a mid-range of $80 per barrel by the end of 2024, up from the June 2023 average of $75 per barrel. We forecast the price of West Texas Intermediate crude oil to follow a similar path and maintain a $5 per barrel discount to Brent, the EIA said in its report.
OIL PRODUCTION
This report also forecasts that OPEC's production of oil and other liquid fuels will average 33.9 million b/d in 2024, 1.2 million b/d less than the 2022 group peak of 35.1 million b/d. These production cuts will keep OPEC's total production below the pre-pandemic (2015-19) five-year average of 36.2 million b/d and reduce OPEC's share of global production to 33% in 2024, down from the pre-pandemic average of 37%.
OIL CONSUMPTION
Non-OECD oil and liquid fuel consumption is expected to grow by 1.6 million b/d from 2022, to an average of 56.5 million b/d in 2024. In terms of consumption, China and India lead the largest consumption of oil, forecasting that the consumption of oil and liquid fuels in China will grow 0.8 million b/d in 2023 and 0.4 million b/d in 2024; and in India, it will grow 0.3 million b/d in both 2023 and 2024.
This report, however, may present some changes due to the volatility in the markets and the movements of the world's oil producers.
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