EIA Cuts 2025 Crude-Price Estimates on Lower Demand Outlook

By Anthony Harrup

The U.S. Energy Information Administration lowered its estimates for crude-oil prices next year, citing a decline in expectations for demand growth.

In its Short Term Energy Outlook, the EIA said Tuesday it expects international-benchmark Brent-crude spot prices to average $77.59 a barrel next year, compared with $84.09/bbl in its previous estimate. The agency also cut its 2025 estimate for U.S.-benchmark West Texas Intermediate crude to $73.13/bbl from $79.63/bbl.

"Although we reduced our crude oil price forecast, crude oil prices have risen in recent days because of escalating conflict in the Middle East, raising the possibility of oil supply disruptions and further crude oil price increases," the EIA said.

The agency said it didn't assume any disruption to oil supplies in its forecasts, although "the conflict has escalated in recent weeks with no timeline for a potential resolution, increasing the possibility for supply disruptions and price volatility." It added that significant surplus of crude-oil-production capacity could be brought online in the event of a disruption.

The lower crude-price estimates are attributed to a reduction in global oil-demand growth in 2025. The EIA sees global oil consumption increasing by 1.3 million barrels a day, down from its estimate of 1.5 million b/d in the September report. Estimated consumption growth for this year remained at 900,000 b/d.

The EIA predicts global oil output will increase next year by 2 million b/d to 104.5 million b/d, down from 104.6 million b/d in its previous estimate.

The lower forecast includes a drop in estimated U.S. production to 13.5 million b/d from 13.7 million b/d previously. Producers outside of the Organization of Petroleum Exporting Countries and its allies are expected to provide 1.4 million b/d of the additional output.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

October 08, 2024 14:06 ET (18:06 GMT)

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