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Short-Term Energy Outlook

Release Date: Feb. 6, 2024  |  Forecast Completed: Feb. 1, 2024  |  Next Release Date: Mar. 12, 2024  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Global oil markets

Global oil prices and inventories
The Brent crude oil spot price averaged $80 per barrel (b) in January, an increase of $2/b from December, the first monthly increase in the crude oil price since September 2023. Prices rose primarily because of heightened uncertainty about global oil shipments as attacks to vessels around the critical Red Sea shipping channel intensified. The Red Sea is more critical to the flexibility of global oil trade than in years past following Russia’s full-scale invasion of Ukraine. These attacks have increased both transit times and shipping costs for oil, limiting the flexibility of the oil market to adjust to any future supply disruptions. The attacks also add a risk premium to prices due to the potential that oil production in the Middle East could be shut in during the forecast period, although no oil production has been lost as of February 6.

world liquid fuels production and consumption balance

The impact of the Red Sea attacks on oil prices has been limited because of prolonged global oil inventory accumulation during 2022 and 2023 and the lack of disruptions to oil production. Our current assessment is that global oil inventories increased by 0.8 million barrels per day (b/d) on average from October 2023, the month before the Red Sea attacks began, through January 2024 and by an average of 0.7 million b/d for all of 2023.

We expect that OPEC+ production cuts will lead to global oil inventory withdrawals during February and March, resulting in an average draw of 0.8 million b/d in 1Q24, which we expect will put upward pressure on oil prices in the coming months. After a period of relatively balanced markets during the rest of 2024, we forecast the market will gradually return to moderate inventory builds in 2025 as slowing growth in oil demand is again outpaced by increasing oil production growth. We forecast that global oil inventories will increase by an average of 0.1 million b/d in the final three quarters of 2024 and by an average of almost 0.5 million b/d in 2025.

We expect that the falling inventories in 1Q24 will increase oil prices into the mid-$80/b range, before slight downward price pressures emerge through the remainder of our forecast. We forecast the Brent crude oil price will average $81/b in December 2024 and fall to $78/b by December 2025.

Global oil production and consumption
We expect that global production of liquid fuels will increase by 0.6 million b/d in 2024, slowing from the increase of almost 1.8 million b/d in 2023. In our forecast, global growth in liquid fuels production is led by non-OPEC supply, which increases by almost 0.8 million b/d, offsetting an OPEC production decline of 0.2 million b/d. Global liquids fuel production increases by almost 1.9 million b/d in 2025 in our forecast. The expiration of existing OPEC+ production targets at the end of 2024 contributes to our forecast that OPEC will increase crude oil production by 0.7 million next year. However, we expect the increase will be limited because Saudi Arabia and other OPEC+ countries will maintain some level of cuts in an attempt to balance markets. Our forecast for non-OPEC production growth averages 1.2 million b/d in 2025, led by the United States, Canada, Brazil, and Guyana.

We forecast that global consumption of liquid fuels will increase by 1.4 million b/d in 2024 and 1.3 million b/d in 2025. Most of the expected liquid fuels demand growth is in non-OECD Asia, led by China and India, which we expect will increase consumption by a combined 0.6 million b/d in 2024 and 0.5 million b/d in 2025. In OECD countries, liquid fuels consumption stays relatively flat in 2024 and 2025.

Global Petroleum and Other Liquids
  2022202320242025
Brent crude oil spot price
(dollars per barrel)
100.9482.4182.4279.48
Global liquid fuels production
(million barrels per day)
99.99101.75102.30104.17
OPEC liquid fuels production
(million barrels per day)
32.9332.1931.9832.63
Non-OPEC liquid fuels production
(million barrels per day)
67.0669.5670.3271.54
Global liquid fuels consumption
(million barrels per day)
99.15101.00102.42103.71
Global GDP
(percentage change)
3.33.12.73.1

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Related Figures
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OPEC surplus crude oil production capacity XLSX PNG
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OECD commercial inventories of crude oil and other liquids (days of supply) XLSX PNG
Estimated unplanned crude oil production outages among OPEC and non-OPEC producers XLSX PNG

Other Resources

WTI crude oil probabilities
(Microsoft Excel file)

Energy Price Volatility and Forecast Uncertainty documentation
(Adobe PDF file)

West Texas Intermediate crude oil price and NYMEX 95% confidence intervals
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