EIA Revises Its 2023 Prediction For Increased Global Oil Demand

Global Oil Demand

In order to reach a total demand of 100.48 million barrels per day (bpd), the United States Energy Information Administration (EIA) has boosted its estimate of the growth in the world’s oil demand for 2023 by 50,000 barrels per day (bpd) to 1.05 million bpd.

The total oil demand forecast for 2024 was also calculated at 102.2 million bpd, an increase of 1.73 million bpd year-over-year and predominantly driven by consumption in China and India.

“We forecast that America and other liquid fuels will increase by 1.1 million barrels per day (b/d) in 2023 and 1.7 million b/d in 2024. This increase reflects large growth in several non-OPEC countries and in OPEC output that more than offset 1.5 million b/d of declines in Russia’s production over the forecast period.”

“We forecast that the United States and other non-OPEC producers outside of Russia will add 2.4” million b/d of oil production in 2023 and an additional 1.1 million b/d in 2024”, it added.

The United States, which provides 40% of growth in 2023 and 60% of growth in 2024 of the non-OPEC production growth, is the main contributor.

Increases in the production of crude oil in the Lower 48 States, primarily in the Permian region, as well as a combination of increases in the production of hydrocarbon gas liquids and biofuels, which together account for about 40% of the growth in America’s production of liquid fuels in 2023 and 2024, are the main drivers of the country’s growth.

The EIA also anticipates that sources of increase in the supply of non-OPEC liquid fuels will balance out decreases in Russia’s oil output.

“We forecast that Russia’s petroleum and other liquid fuels production will decline to 9.5 million b/d in 2023, from 10.9 million b/d in 2022, and then average 9.4 million b/d in 2024. The extent to which European Union sanctions, other sanctions, and the G7 price cap will affect Russia’s crude oil and petroleum product exports and production remains uncertain.

“We expect that most crude oil exports from Russia will continue to find buyers. But we expect the sanctions on petroleum products will cause greater disruptions to Russia’s oil production and exports because finding alternative buyers as well as transportation and other services to reach those buyers is likely to be more challenging than for crude oil”, it added.

In our prediction, OPEC crude oil output will average 29.5 million b/d in 2024, an increase of 0.8 million b/d from 2022. Venezuela is a contributing factor to some of this increase.

Following the conclusion of November’s issuance of General License (GL) 41 by the American Department of the Treasury, Chevron has started producing oil in Venezuela once more for export to the United States.

Due to a combination of potential outcomes for national compliance with current OPEC+ production targets and revisions to existing OPEC+ targets, as well as ongoing developments in Iran, Libya, and Venezuela, the EIA’s prediction for OPEC production is fraught with uncertainty.

Other significant countries outside of America that are increasing their production of non-OPEC liquid fuels include Canada, Brazil, Guyana, and Norway.

EIA anticipates that initiatives to reduce distribution bottlenecks, such as the start-up of the TransMountain pipeline extension project, will be the primary drivers of growth in Canada’s output. New floating production, storage, and offloading (FPSO) deepwater rigs are what are responsible for Brazil’s increases.

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