Commodities Buzz: EIA expects Brent Crude to average $74 per barrel in 2025 compared to $81 per barrel this year

The US Energy Information Administration or EIA has stated in its Short Term Energy Outlook for December that growth in crude oil production next year will come mostly from non-OPEC countries because of ongoing production restraint on the part of OPEC+. At its December 5 meeting, OPEC+ announced that it would delay production increases until April 2025. Those increases had been set to begin in January 2025. EIA forecast that global oil production will increase by 1.6 million barrels per day (b/d) in 2025, and we expect almost 90% of that growth will come from countries that do not participate in OPEC+. EIA expects that the Brent crude oil spot price will remain close to its current level in 2025, averaging $74 per barrel for the year, as oil markets will be relatively balanced on an annual average basis. This is a notable decline from $81 per barrel estimated for the current year by the EIA. It noted that the extension of OPEC+ production cuts will cause inventories to fall by 0.7 million b/d the first quarter of 2025 (1Q25). However, we expect the subsequent ramp up in OPEC+ production and continued supply growth outside of OPEC+ will lead to an average inventory build of 0.1 million b/d over the remainder of 2025.

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