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Informist, Wednesday, May 7, 2025

 

MUMBAI – The US Energy Information Administration has lowered its forecast for crude oil prices in 2025 and 2026 because of rising global oil inventories, the agency said in its short-term energy outlook for May. It expects Brent crude oil prices to average $66 per barrel this year against its previous projection of $68 per barrel and the West Texas Intermediate crude oil to average $62 per barrel, down from $64 per barrel in its previous forecast.

 

In 2026, the agency expects Brent crude oil prices to average $59 per barrel and WTI crude oil to average $55 per barrel, both down $2 per barrel from the previous forecast.

 

The EIA expects global oil inventories to grow by 500,000 barrels per day on an average in the second quarter of the year, further rising to 700,000 barrels per day in the fourth quarter of the year. In 2025, global oil inventories are expected to grow on average by 400,000 barrels per day and accelerate to 800,000 barrels per day on average next year.

 

Crude oil prices have been on a downtrend this year, driven primarily by expectations of lower global oil demand following the implementation of new tariffs by the US and its largest trading partners. In April, the Organization of the Petroleum Exporting Countries and its allies also reaffirmed and accelerated their planned production increases, adding to expectations that global oil inventories will grow and put additional downward pressure on oil prices, the agency said.

 

The EIA expects global oil production growth to rise this year and in 2026 due to a combination of scheduled production increases by OPEC and its allies and further growth from countries outside the cartel. It expects global oil production to grow 1.4 million barrels per day in 2025, higher than its previous projection of a rise of 1.3 million barrels per day. It has projected global oil production to rise by 1.3 million barrels per day in 2026, against its previous forecast of a rise of 1.2 million barrels per day.

 

The agency expects that oil production growth will be led by countries outside 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 600,000 barrels per day in 2026. "Although OPEC+ members recently announced they plan to raise production in June, we still anticipate the group will produce below the current target path," the agency said.

 

US crude oil production in 2025 is seen lower at 13.42 million barrels per day, compared with 13.51 million barrels per day projected in April. However, the world's biggest oil producer's production is likely to rise to 13.49 million barrels a day, against the previous forecast of 13.56 million barrels per day.

 

Global consumption of liquid fuels is forecast to rise by 1 million barrels per day in 2025, down 100,000 barrels per day from the agency's forecast last month. In 2026, it sees consumption of liquid fuels rising by 900,000 barrels per day, down 100,000 barrels per day from its previous forecast.

 

EIA expects consumption of liquid fuels in India to rise by 200,000 barrels per day in 2025 and 300,000 barrels per day in 2026, driven by rising demand for transportation fuels. The agency expects China's consumption of liquid fuels to grow by 200,000 barrels per day, both in 2025 and 2026.

 

At 1324 IST, the price of Brent crude on the Intercontinental Exchange was $63.03 per barrel and the price of WTI crude on NYMEX was $60 per barrel.  End

 

US$1 = INR 84.85

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

 

Reported by Ashutosh Pati

Edited by Nishant Maher

  

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