EIA predicts oil price increase in latest outlook

The Energy Information Administration has forecasted global oil consumption will exceed production, leading to increased oil prices through the end of 2024.

OPEC+ production cuts being extended until December is a major reason EIA’s expects crude oil prices will average $82 per barrel by the fourth quarter of this year.

“We expect that oil prices will be pushed upward in the coming weeks and months as global oil consumption outpaces production,” EIA Administrator Joe DeCarolis said. “There are uncertainties in the market, including demand growth in China and supply disruptions in the Middle East, that could push prices higher or lower in the short term.”

Market concerns over economic growth and #oil demand have increased.

But we expect that global oil reserves will begin to decline as OPEC+ production cuts result in global oil consumption exceeding global oil production. #STEO

▶️ https://t.co/111I5pOhBZ pic.twitter.com/bjKhA9ZKbN

— EIA (@EIAgov) September 10, 2024

EIA said natural gas prices will remain flat through the end of the year before rising in 2025. U.S. production of natural gas in 2025 is expected to surpass the domestic production record set in 2023.

Propane prices, now analyzed as part of EIA’s short-term energy outlook, are expected to mirror last winter’s prices ($2.50 per gallon).

Biofuels have been added to the EIA outlook and are expected to account for 9% of this year’s total distillate fuel oil consumption.

The national average diesel price per gallon will be $3.71 in the third quarter before falling to $3.61 per gallon by the end of the year, according to EIA’s forecast. Diesel prices are predicted to increase from that mark in the first two quarters of 2025, but EIA said they will remain below $3.70 per gallon nationally.

The full EIA short-term energy outlook is available here. LL

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