In its newest brief time period vitality outlook (STEO), the U.S. Vitality Info Administration (EIA) lowered its Brent spot common worth forecast for 2024 and 2025.
The EIA now sees the Brent spot worth averaging $84.44 per barrel this yr and $85.71 per barrel subsequent yr. In its earlier July STEO, the EIA projected that the Brent spot worth would common $86.37 per barrel in 2024 and $88.38 per barrel in 2025.
A quarterly breakdown within the newest STEO reveals that the EIA expects the Brent spot worth to common $84.06 per barrel within the third quarter, $85.97 per barrel within the fourth quarter, $88.66 per barrel within the first quarter of 2025, $86.33 per barrel within the second quarter, $85 per barrel within the third quarter, and $83 per barrel within the fourth quarter.
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In its earlier STEO, the EIA forecast that the Brent spot worth would common $87.97 per barrel within the third quarter, $89.64 per barrel within the fourth quarter, $90.66 per barrel within the first quarter of subsequent yr, $89 per barrel within the second quarter, $88 per barrel within the third quarter, and $86 per barrel within the fourth quarter.
“The Brent crude oil spot worth averaged $85 per barrel in July, up $3 per barrel from the typical in June,” the EIA said in its August STEO.
“Though the month-to-month common Brent spot worth was larger in July, each day spot costs fell towards the top of the month pushed partially by indicators that world financial circumstances could also be slowing, which has the potential to scale back world oil demand development,” it added.
“Though market considerations concerning the financial system have lowered crude oil costs in current days, we nonetheless count on that the newest spherical of OPEC+ manufacturing cuts will cut back world oil inventories over the subsequent three quarters in our forecast and push oil costs larger,” they continued.
Within the STEO, the EIA famous that it expects world oil inventories will lower by a median of 0.8 million barrels per day within the second half of 2024, “with additional declines in 1Q25”.
“We anticipate that the market will progressively return to reasonable stock builds in mid-2025 after the expiration of voluntary OPEC+ provide cuts in 4Q24 and as forecast manufacturing development from international locations outdoors of OPEC+ begins to outweigh world oil demand development,” the EIA added.
“We estimate that world oil inventories will improve by a median of 0.3 million barrels per day within the second half of 2025,” it continued.
In a report despatched to Rigzone this week, Bjarne Schieldrop, the Chief Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), revealed that SEB’s “goal is for a Brent crude worth of $85 per barrel for 2024”.
“To this point it has averaged $83.3 per barrel. Distribution of costs inside a yr sometimes varies +/-USD 15 per barrel from the imply. That means that we must always see each $100 per barrel and $70 per barrel,” he added.
“Final yr we had a excessive of $97.7 per barrel and a low of $70.1 per barrel. To this point this yr we have now had a excessive of $92.2 per barrel and a low of $74.8 per barrel,” he added.
A separate report despatched to Rigzone this week by Customary Chartered Financial institution Commodities Analysis Head Paul Horsnell confirmed that the corporate expects the ICE Brent close by future crude oil worth to common $106 per barrel within the fourth quarter of this yr and $109 per barrel total in 2025.
A analysis notice despatched to Rigzone by the JPM Commodities Analysis group final Friday confirmed that J.P. Morgan expects the Brent crude worth to common $83 per barrel this yr and $75 per barrel subsequent yr.
In a Rystad Vitality oil macro replace despatched to Rigzone on Tuesday by the Rystad group, Svetlana Tretyakova highlighted that oil costs had been “having a unstable begin to the week, dropping as little as $75 on Monday, the bottom worth since December 2023, earlier than rebounding later within the day”.
“Costs plunged final week as fears of a recession within the U.S. gathered tempo and beforehand bullish buyers bought their petroleum positions, however the opportunity of provide disruptions within the Center East are serving to to maintain costs from falling off a cliff,” Tretyakova added within the replace.
To contact the writer, e mail andreas.exarheas@rigzone.com
