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Informist, Friday, Apr. 11, 2025

MUMBAI – The US Energy Information Administration has lowered its forecast for global oil demand growth in 2025 to 900,000 barrels per day from its previous projection of 1.3 million barrels per day, the agency said in its Short-Term Energy Outlook for April. It has also lowered the global oil demand growth forecast for 2026 to 1 million barrels per day from 1.2 million barrels per day.

Crude oil prices have plunged in the first week of April as market participants assessed the wave of tariffs from the US and an unexpected rise in production by OPEC and its allies. "These announcements increase the likelihood that global oil inventories will rise in the coming month and have the potential to put further downward pressure on oil prices," the agency said.

The agency expects Brent Crude prices on the Intercontinental Exchange to average $67.87 per barrel in 2025 against its previous forecast of $74.22 per barrel. It also scaled down its forecast for Brent Crude prices in 2026 to $61.48 per barrel from $68.47 per barrel projected last month.

As for West Texas Intermediate crude on the New York Mercantile Exchange, the US energy agency has lowered its estimate for 2025 to $63.88 per barrel from $70.68 per barrel. In 2026, the agency expects WTI prices to average $57.48 per barrel compared with its previous estimate of $64.97 per barrel.

"Significant uncertainty remains in our price forecast. The effect that new or additional tariffs will have on global economic activity and associated oil demand is still highly uncertain and could weigh heavily on oil prices going forward," the agency said. The downward revision in crude oil prices reflects uncertainty around global oil demand growth and the potential for additional supply from OPEC and its allies in the coming months, the agency said. Factors including existing sanctions on Russia, Iran, and Venezuela, create additional uncertainty for crude oil prices, it added.

EIA expects global oil inventories to increase by 600,000 barrels per day in the second quarter of 2025 and by 700,000 barrels per day on average in the second half of the year. Inventories will continue to accumulate at that pace in 2026, it said.

EIA expects global oil production to rise by 1.3 million barrels per day in 2025, slightly lower than its previous projection of a rise of 1.4 million barrels per day. It has projected global oil production to rise by 1.2 million barrels per day in 2026, against its previous forecast of a rise of 1.6 million barrels per day.

The agency expects OPEC and its allies to start increasing production from this month, though it expects the cartel to produce below its current target path during most of the next two years to limit increases in global oil inventories and support prices. The agency expects that oil production growth will be led by countries outside of the OPEC and its allies, such as the US, Canada, Brazil, and Guyana. These nations will increase production by 1.2 million barrels per day in 2025 and by 700,000 barrels per day in 2026.

US crude oil production in 2025 is seen lower at 13.51 million barrels per day, compared to 13.61 million barrels per day projected last month. In 2026, production by the world's biggest oil producer is seen rising to 13.56 million barrels per day, against the previous forecast of 13.76 million barrels per day, the report said.

The agency expects China's petroleum and liquid fuels consumption to increase by 200,000 barrels per day in both 2025 and 2026, compared with its previous projection of a rise of 300,000 barrels per day in 2025 and of 200,000 barrels per day in 2026.

At 1125 IST, the price of Brent Crude on the Intercontinental Exchange was $63.88 per barrel and the price of  WTI crude on NYMEX was $60.61 per barrel.  End

US$1 = INR 86.15

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ashutosh Pati

Edited by Avishek Dutta

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