EIA cuts forecasts for oil demand growth and oil prices in 2025

Global oil demand is set to grow next year at a slower rate than previously expected, the US Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO) for October, while -cut Brent oil price forecasts for 2025 due to lower expected demand growth.

The EIA now expects global oil demand to rise by 1.3 million barrels per day (bpd) in 2025 due to downgraded consumption forecasts in developed OECD economies.

In its September STEO, the EIA had projected that global consumption of liquid fuels would increase by 1.5 million bpd in 2025.

In October’s outlook, the administration cut its forecast for total OECD oil consumption by 200,000 bpd in 2025 from last month’s STEO, following weaker expectations for industrial production and output growth in the United States and Canada.

Most of the EIA’s projected increase in global liquid fuels demand comes from non-OECD countries, where liquid fuels consumption will increase by 1.0 million bpd in 2024 and 1.2 million bpd in 2025. This would be in contrast to consumption in OECD countries, which is expected to fall by 100,000 bpd in 2024, before rising by a similar amount in 2025.

For the US, the EIA cut its forecast for liquid fuel consumption to 20.49 million bpd in 2025, down from a September estimate of 20.64 million bpd.

In its October STEO, the EIA cut its forecast for the Brent spot price through the end of next year. In this month’s outlook, the administration expects Brent to average $78 a barrel in 2025, which is $7 a barrel lower than last month’s STEO forecast. The low crude oil prices in the forecast “largely reflect a reduction in global oil demand growth in 2025,” the EIA said.

Brent crude oil prices were slightly down 0.4% at $76.80 early Wednesday.

By Tsvetana Paraskova for Oilprice.com

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