EIA Predicts Global Oil Market Supply Deficit in 2025

SEATTLE (Oil Monster): The U.S. Energy Information Administration (EIA), in its latest update, predicts that global oil demand is likely to outpace supply in 2025, thus resulting in a supply deficit. This is in contrast to its prior forecast of a surplus market.

This follows the recent decision by the OPEC+ members to extend their oil output cuts into next year. The deficit will be lower next year, EIA noted. In the event of a deficit, refiners may need to draw oil from inventories to meet demand. The withdrawals from global inventories will push oil prices higher.

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According to Monthly Short Term Energy Outlook (STEO) report published by the EIA, the global oil demand is projected to average at about 104.7 million barrels per day (bpd) next year. Also, the supply is forecast to be around 104.6 million bpd. This compares with demand and supply of 104.5 million bpd and 104.7 million bpd, in its previous forecast.

The projected lower OPEC+ output is expected to lead to further supply deficit during the rest of 2024. The STEO predicts global oil demand to surpass output by around 750,000 barrels per day (bpd) in H2 this year. This is higher when matched with earlier projected deficit of 550,000 bpd for the period.

The global benchmark Brent crude oil prices are likely to average at $89 per barrel in H2 2024, higher from $84 per barrel in the initial six-month period of the current year.