US Energy Information Administration upgrades forecasts for crude oil price for 2025
Date
1/15/2025 7:09:57 AM
(MENAFN) The US Energy Information Administration (EIA) has revised its forecast for crude oil prices in 2025, reflecting lower global oil inventories expected in the first quarter of the year. The agency attributes the anticipated price increases to the recent decision by the OPEC+ group to extend production cuts, which are expected to lead to global oil inventory withdrawals of 500,000 barrels per day (bpd) on average in the first quarter of 2025, according to the EIA's Short-Term Energy Outlook (STEO) released late Tuesday.
As a result of the anticipated decline in global oil inventories, the EIA predicts that crude oil prices will rise by USD2 per barrel from their December 2024 average, reaching USD76 per barrel in the first quarter of 2025. However, the agency forecasts that after this brief price increase, oil prices will begin to decline from mid-2025 through the end of 2026. This is expected to occur as global oil production grows at a faster rate than oil demand.
The EIA now predicts that the average price for Brent crude oil will be USD74.31 per barrel in 2025, while the American West Texas Intermediate (WTI) is expected to trade at USD70.31 per barrel. These figures represent slight increases from last month's report, where Brent and WTI prices were forecasted at USD73.58 and USD69.12 per barrel, respectively.
For 2024, the EIA reported an average price of USD80.56 per barrel for Brent crude and USD76.60 per barrel for WTI. The agency also highlighted two major sources of uncertainty regarding oil prices: the potential weakening of OPEC+ producers' commitment to production cuts, which poses downside risks to prices, and the possibility of heightened tensions in the Middle East, which could further impact price dynamics.
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