U.S. crude oil production is forecast to rise more than previously thought in 2023, while global oil inventories are expected to fall, after Saudi Arabia extended output cuts this month, the Energy Information Administration said on Tuesday.
U.S. crude output is due to rise by 870,000 barrels per day in 2023 to 12.78 million barrels, up from a forecast from last month of an 850,000 bpd increase. In 2024 oil output is expected to rise by 380,000 bpd to 13.16 million bpd.
Global oil stockpiles are forecast to fall by 200,000 bpd in the fourth quarter of 2023, the EIA said, after Saudi Arabia said it would continue its voluntary crude oil production cut of 1 million bpd through the end of this year. Previously, the voluntary cut was set to expire at the end of September.
The decline in inventories should increase the price of the international benchmark Brent contract to an average of $93 per barrel during the fourth quarter, up from the $86 per barrel average in August, the EIA said.
The Brent price is expected to ease to an average of $87 per barrel by the second half of 2024 as inventories rise, it added.
On the demand side, U.S. total petroleum consumption is expected to rise by 100,000 bpd to 20.1 million bpd in 2023, less than previously forecast, the EIA said. In 2024, consumption is forecast to rise by 200,000 bpd to 20.3 million bpd.
The EIA reduced its forecast for U.S. gasoline consumption in 2024 by 200,000 bpd to 8.7 million bpd. The decrease came after the U.S. Census Bureau revised its population estimates for the United States to include fewer people of working age and more people of retirement age, who tend to drive less, the EIA said.
Meanwhile, U.S. natural gas consumption is forecast to average a record 80.5 billion cubic feet per day in September, an increase of 5% from the same time last year. The increase follows elevated natural gas-fired electricity generation from strong U.S. air-conditioning demand, as well as reduced generation from coal-fired plants, the EIA said.
