According to the US Energy Information Administration, global oil demand will increase this year at a time when production growth is less than expected.
According to the agency’s short-term energy projection, the expanding supply gap will cause oil from world stockpiles to be more depleted, hence driving Brent crude prices back above $80 a barrel in the spot market this month.
She further noted that on September 6 Brent crude prices in spot trades averaged $73 per barrel. For the first time since December 2021, futures contracts for the global benchmark crude dropped Tuesday below $70 a barrel.
From its prior projection of 102.9 million barrels daily, the CIA expects global oil demand to average about 103.1 million barrels daily, an increase of roughly 200,000 barrels daily.
After OPEC shelved its intention to raise output, the agency stated world production is now projected to average 102.2 million barrels daily, down from a previous estimate of 102.4 million barrels daily.
Originally scheduled to increase output from October, OPEC and its partners postponed their plan last week due to declining crude prices amid a poor global economy and will boost output from December.
Still double the U.S. Energy Information Administration’s present estimate of increase of approximately 1 million barrels per day, OPEC on Tuesday reduced its projection for crude oil demand growth this year to about 2 million barrels per day.
Comparatively to a deficit of 0.5 million barrels daily in its prior estimate, the Energy Information Administration projects that global oil consumption will surpass output by roughly 0.9 million barrels daily this year.
The agency stated, “despite growing market concerns about economic growth and oil demand growth, especially in China, which has caused oil prices to fall, OPEC+ production cuts mean less global oil production compared to consumption.”
