US EIA expects global oil demand to increase this year

(MENAFN) The U.S. Energy Information Administration (EIA) announced on Tuesday that global oil demand is expected to increase this year, while the growth in production will be lower than initially anticipated. According to the agency's short-term energy outlook, the expanding supply gap will lead to a drawdown in global oil inventories, pushing crude oil prices back above USD80 per barrel in the spot market this month.

As of September 6, Brent crude prices averaged USD73 per barrel in spot transactions. However, on Tuesday, futures contracts for Brent crude fell below USD70 per barrel for the first time since December 2021, reflecting market concerns over supply and demand dynamics. The report suggests that crude prices may recover in the near term due to tightening supply.

The EIA revised its forecast for global oil demand, predicting it will average about 103.1 million barrels per day in 2024, which is 200,000 barrels per day higher than its previous estimate of 102.9 million barrels per day. On the other hand, global oil production is now projected to average 102.2 million barrels per day, a slight reduction from the earlier forecast of 102.4 million barrels per day. This downward revision follows OPEC's decision to delay its planned production increase.

OPEC and its allies had originally intended to raise production starting in October, but they postponed this plan last week due to falling crude prices and a sluggish global economy. The group will now increase output from December. Additionally, OPEC reduced its forecast for global oil demand growth to around 2 million barrels per day, still significantly higher than the EIA's estimate of roughly 1 million barrels per day growth.

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