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Crude oil boosted as EIA forecasts price rise in H2
Crude oil futures traded marginally higher on Thursday morning as the US Energy Information Administration (EIA) estimated an increase in crude oil prices through 2024.
At 9.53 am on Thursday, September Brent oil futures were at $79.53, up by 0.09 per cent, and September crude oil futures on West Texas Intermediate (WTI) were at $75.38, up by 0.12 per cent.
August crude oil futures were trading at ₹6,196 on Multi Commodity Exchange (MCX) in the initial trading hour of Thursday morning against the previous close of ₹6,206, down by 0.16 per cent, and September futures were trading at ₹6,215 as against the previous close of ₹6,224, down by 0.14 per cent.
US EIA forecast higher crude oil prices in the second half of 2023 and into 2024 because of moderate but persistent inventory drawdowns, which occur when demand exceeds supply.
“We expect production cuts from OPEC members and forecast higher petroleum consumption will lead to an average inventory drawdown of 0.4 million barrels per day between July 2023 and the end of 2024,” it said.
It forecast an increase in Brent crude oil price to mid-$80 a barrel by the end of 2024, up from the June 2023 average of $75 a barrel. It forecast a similar path for the WTI crude oil price, to maintain a discount to Brent of $5 a barrel.
US EIA estimated that Saudi Arabia accounted for about 10 per cent of the global production of petroleum and other liquid fuels, or 10.1 million barrels a day, in June 2023. “We forecast OPEC production of petroleum and other liquid fuels will average 33.9 million barrels a day in 2024, down 1.2 million barrels a day from the group’s 2022 peak of 35.1 million barrels a day. These production cuts will keep total OPEC production below the pre-pandemic five-year (2015–19) average of 36.2 million barrels a day and reduce OPEC’s share of world production to 33 per cent in 2024, down from the pre-pandemic average share of 37 per cent,” it said.
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