US EIA lowers 2024 Brent price forecast despite OPEC+ oil output cuts

US EIA lowers 2024 Brent price forecast despite OPEC+ oil output cuts

The U.S. Energy Information Administration on Tuesday lowered its 2024 price forecast for international benchmark Brent crude by $10 a barrel, despite a recently announced oil production output deal from OPEC+.

Brent will average $83 per barrel in 2024, the EIA forecasted in a monthly report, versus an estimate the administration published last month of $93 per barrel.

Still, in the first half of 2024, the cuts from the Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, will help boost the Brent crude oil spot price to $83 per barrel on average from $78 per barrel this month, the EIA said.

The Nov. 30 OPEC+ deal included Saudi Arabia and Russia rolling over current cuts of 1.3 million barrels per day (bpd) and nearly 1 million bpd in new voluntary reductions by others.

Meanwhile, the EIA slightly raised its forecast for U.S. 2023 crude production from last month's report.

U.S. crude output is expected to rise by 1.02 million bpd to a record 12.93 million bpd this year, the EIA said, overtaking the previous peak of 12.3 million in 2019. Production in 2024 is due to rise by 180,000 bpd to 13.11 million bpd, it added.

Higher U.S. crude and hydrocarbon gas liquids production will push net exports of U.S. crude and petroleum products to a record high of almost 2.0 million bpd in 2024, the EIA said, up from about 1.8 million bpd this year.

U.S. total petroleum consumption is due to rise by 100,000 bpd to 20.1 million bpd in 2023, and by 300,000 bpd to 20.4 million bpd in 2024, the EIA said.