There is an ongoing forecast war between the US EIA and OPEC over demand growth this year. Despite strong economic growth this year (which is generally correlated with oil demand), the EIA is doubling down.
- Reduces global oil demand forecast for 2024 by 480,000 b/d
- Reduces global oil demand forecast for 2025 by 30,000 b/d
- US oil production is expected to increase by 280,000 b/d in 2024, up from 260,000 b/d previously.
- US oil production is expected to increase by 510,000 b/d in 2025, up from 460,000 b/d previously
There is a demand caveat here, as the estimate for 2023 was increased from 1.85 mbpd to 2.02 mbpd.
Overall, they now see demand at 102.34 and supply at 102.10 mbpd for the month of March. This is a small deficit that has certainly been reflected in recent prices.
I don’t put too much stock in these predictions, but they will be worth monitoring towards the end of the year when we know which side missed the mark by a wide margin.
And of course, American production is extremely price sensitive. With WTI at $85.67, it won’t be long before U.S. drilling picks up. Shale can quickly add supply.
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