After the recent decision by OPEC+ to extend crude oil production cuts through 2024, U.S. Energy Information Administration now forecasts global oil inventories to decline slightly in each of the next five quarters to put upward pressure on crude oil prices. EIA forecasts Brent spot prices to average $79.54 in 2023 and $83.51 in 2024 compared to its previous forecasts of $78.65 in 2023 and $74.47 in 2024.
EIA also said June 6 in its monthly short term energy outlook it expects lower global oil production through 2024 compared to its forecast last month. But despite the extension of OPEC+ production cuts, EIA forecasts global liquid fuels production will increase by 1.5 million b/d in 2023 and by 1.3 million b/d in 2024 primarily due to growth from non-OPEC producers, including U.S. and Canada. And EIA expects global and U.S. liquid fuel consumption to rise in 2023 and 2024.
EIA said U.S. dry natural gas production will average almost 103 Bcfd in second half 2023 – slightly below its estimate of about 104 Bcfd in April and May. The decline reflects a reduction in directional drilling for natural gas as Henry Hub natural gas spot prices fall. EIA expects growth in associated natural gas production in Permian Basin to mostly offset declines in dry gas production.