US energy agency revises up crude oil price forecasts for 2025

International benchmark Brent crude estimated to average $74.31 per barrel

The US Energy Information Administration (EIA) revised up its forecast for crude oil prices for 2025 over the relatively lower global oil inventories in the first quarter of the year. Increases in oil prices in the coming months are largely attributed to the OPEC+ group's recent extension of production cuts, which would lead to global oil inventory withdrawals of 500,000 barrels per day (bpd) on average in the first quarter of 2025, according to the EIA's Short-Term Energy Outlook (STEO) released late Tuesday. The agency forecasts that declining global oil inventories will increase crude oil prices by $2 per barrel from their December 2024 average to an average of $76 per barrel in the first quarter of 2025. However, after a brief price increase in early 2025, the EIA expects crude oil prices to decline from mid-2025 through the end of 2026 as growth in global oil production outpaces growth in oil demand. As a result, the EIA forecasts that average Brent oil prices will be $74.31 per barrel and the American West Texas Intermediate (WTI) is expected to trade at $70.31 per barrel in 2025. In the previous month's report, these figures were $73.58 and $69.12, respectively. For 2024, the agency reported an average price of $80.56 per barrel for Brent crude and $76.60 per barrel for WTI. Pointing to two main sources of "significant" price uncertainty, the EIA said that the potential weakening of OPEC+ producers' commitment to production restraints introduces downside risks to oil prices, while heightened tensions in the Middle East and future developments could impact price dynamics. 
 US crude production forecast revised up Crude oil production in the US is expected to average 13.55 million bpd in 2025, up from 13.21 million bpd last year. The figure is around 30,000 bpd higher than the previous month's forecast. The agency also estimated that the average global oil production will be 104.36 million bpd at the end of the year. Global oil demand, meanwhile, is anticipated to reach 104.1 million bpd in 2025.