EIA Raises Crude Oil Price Forecasts for 2025

The US Energy Information Administration (EIA) has revised up its forecast for crude oil prices by $2 per barrel through the end of next year due to the expectations of a higher global oil demand growth in 2025.

The Brent crude oil spot price averaged $76 per barrel in November, increasing $2 per barrel from September, according to the EIA’s Short-Term Energy Outlook (STEO) recently released.

The IEA identified two primary sources of uncertainty impacting oil prices; ongoing Middle East conflict and the commitment of the Organisation of Petroleum Exporting Countries (OPEC) members to voluntary production cuts.

‘’First, although the volatility and risk premium associated with the conflict in the Middle East has moderated in recent weeks, the duration and severity of the ongoing conflict remain uncertain, as is the potential for escalation to reduce oil supplies. 

“Second, although we assess that OPEC+ producers will likely continue to limit production below recently announced targets in 2025, the potential for weakening commitment among OPEC+ producers to continue cutting production adds downside risk to oil prices,’’ the report said.

The EIA forecasts that for next year, Brent crude will average $76.06 per barrel and WTI will average $71.60 per barrel, Anadolu Agency stressed.

Next year, crude oil output in the US is expected to reach 13.53 million bpd, down by about 10,000 bpd from last month’s prediction.

The agency also estimated that average global oil production will be 102.62 million bpd at the end of the year and 104.66 million bpd next year. Global oil demand, meanwhile, is anticipated  to be around 104.35 million bpd in 2025.