EIA outlook says global oil supply to increase

November 8, 2023

SJ Munoz

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In its November 2023 outlook, the Energy Information Administration said global fuel production will increase by 1 million barrels per day in 2024.

However, EIA is forecasting a slight decline in global oil inventories in early 2024 due to ongoing OPEC+ production cuts offsetting non-OPEC production growth.

Fuel consumption is expected to drop per capita in 2024, according to EIA’s forecast.

“U.S. motorists are driving less because they aren’t commuting to work every day, newer gasoline-fueled vehicles are more efficient and there are more electric vehicles on the road,” EIA Administrator Joe DeCarolis said in a news release. “Put those trends together with high prices and inflation, and we find that U.S. motorists are using less.”

The Brent crude oil price is expected to average $93 per barrel in 2024, an increase of $9 per barrel from 2023.

EIA said risks of supply disruption and price volatility are heightened amid potential conflict spreading in the Middle East.

 

Overview
2021 2022 2023 2024
Brent crude oil
(dollars per barrel)
70.89 100.94 83.99 93.24
U.S. crude oil production
(million barrels per day)
11.27 11.91 12.90 13.1

 

Diesel forecast

By the end of 2023, EIA forecasts the national average diesel price per gallon to be $4.46. That price is expected to drop to $4.23 per gallon by the second quarter of 2024.

EIA’s weekly fuel report, last released on Monday, Nov. 6, showed a national average of $4.366 after a decrease of 8.8 cents. The national diesel average has dropped in four out of the past five weeks, according to EIA.

Also according to EIA, diesel prices in some regions were down by as much as 16.1 cents, with the highest price per gallon in California ($5.816).

Of note

EIA said record coal demand from Europe and Asia is driving U.S. exports to pre-pandemic levels. The agency still expects coal production to fall next year, with the electric power sector generating more power from solar and wind.

With winter conditions forecast to be colder and summer temperatures warmer in 2024, electricity consumption in the U.S. is expected to increase. The largest increase will be in the residential section, but commercial and industrial sectors will also see an increase, EIA said. LL

The full EIA outlook is available here.