In its latest Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) lowered its forecast for the average Brent spot price for 2024 and 2025.
The EIA now expects the spot price for Brent to average $84.44 per barrel this year and $85.71 per barrel next year. In its previous STEO in July, the EIA forecast that the spot price for Brent would average $86.37 per barrel in 2024 and $88.38 per barrel in 2025.
A quarterly breakdown in the latest STEO shows that the EIA expects the Brent spot price to average $84.06 per barrel in the third quarter, $85.97 per barrel in the fourth quarter, $88.66 per barrel in the first quarter of 2025, $86.33 per barrel in the second quarter, $85 per barrel in the third quarter and $83 per barrel in the fourth quarter.
In its previous STEO, the EIA forecast that the spot price for Brent would average $87.97 per barrel in the third quarter, $89.64 per barrel in the fourth quarter, $90.66 per barrel in the first quarter of next year, $89 per barrel in the second quarter, $88 per barrel in the third quarter, and $86 per barrel in the fourth quarter.
“The spot price for Brent crude oil averaged $85 per barrel in July, $3 above the June average,” the EIA said in its August STEO.
“Although the monthly average spot price for Brent was higher in July, daily spot prices fell towards the end of the month, partly due to signals that global economic conditions may be weakening, which could slow global oil demand growth,” it added.
“Although market concerns about the economy have pushed crude oil prices lower in recent days, we still expect the latest round of OPEC+ production cuts to reduce global oil inventories over the next three quarters and push oil prices higher,” they continued.
In the STEO, the EIA noted that it expects global oil inventories to decline by an average of 0.8 million barrels per day in the second half of 2024, “with further declines in the first quarter of 2025.”
“We expect the market to gradually return to moderate inventory buildup in mid-2025 after the expiration of voluntary OPEC+ supply cuts in the fourth quarter of 2024 and projected production growth from non-OPEC+ countries begins to exceed global oil demand growth,” the EIA added.
“We estimate that global oil inventories will increase by an average of 0.3 million barrels per day in the second half of 2025,” it said.
In a report sent to Rigzone this week, Bjarne Schieldrop, chief commodity analyst at Skandinaviska Enskilda Banken AB (SEB), revealed that SEB’s “target is a Brent crude oil price of $85 per barrel for 2024.”
“So far, the average price has been $83.3 per barrel. The price distribution within a year usually deviates from the mean by +/- $15 per barrel. This means we should see both $100 per barrel and $70 per barrel,” he added.
“Last year we had a high of $97.7 per barrel and a low of $70.1 per barrel. So far this year we have had a high of $92.2 per barrel and a low of $74.8 per barrel,” he added.
A separate report sent to Rigzone this week by Paul Horsnell, head of commodities research at Standard Chartered Bank, shows that the company expects ICE Brent crude oil prices to average $106 per barrel in the fourth quarter of this year and $109 per barrel overall in 2025.
A research note sent to Rigzone by the JPM Commodities Research team last Friday showed that JP Morgan expects the price of Brent crude oil to average $83 per barrel this year and $75 per barrel next year.
In a macro update on Rystad Energy’s oil price sent to Rigzone by the Rystad team on Tuesday, Svetlana Tretyakova highlighted that oil prices “had a volatile start to the week, falling to as low as $75 on Monday, the lowest price since December 2023, before recovering later in the day.”
“Prices plunged last week as fears of a U.S. recession grew and previously optimistic investors sold their oil positions, but the possibility of supply disruptions in the Middle East is helping to keep prices from plummeting,” Tretyakova added in the update.
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