Global Oil Reserves to Decline as Saudi Cuts Extend, EIA Reports

The Energy Information Administration (EIA) delivered a significant forecast in its monthly report on Tuesday, indicating a forthcoming reduction in global oil inventories. This projection comes in the wake of Saudi Arabia’s decision to extend its production cuts, while the EIA also adjusted its estimates for U.S. crude production.

The EIA anticipates a decrease of 200,000 barrels per day in global oil stockpiles during the fourth quarter. This shift is attributed to Saudi Arabia’s voluntary extension of its 1 million bpd production cut, initially set to conclude at the end of September, now extended until the year’s end.

In a parallel move, the EIA revised its 2023 global oil demand growth estimate, raising it by 50,000 bpd to reach 1.81 million bpd. However, for 2024, the agency adjusted its oil demand growth forecast downwards by 250,000 bpd, projecting a figure of 1.36 million bpd.

The expected decline in global oil inventories is poised to drive the price of the international benchmark, Brent crude, to an average of $93 per barrel during the fourth quarter. This marks an increase from the $86 average witnessed in August, according to the EIA. However, the agency also foresees a subsequent easing of Brent crude prices, with an expected average of $87 in the second half of 2024 as inventories rise.

EIA Administrator Joe DeCarolis commented on the situation, stating, “High oil prices, coupled with uncertain economic conditions, may impact global demand for petroleum products through 2024.”

Turning the focus to the United States, the EIA predicts a substantial rise in crude oil production. In 2023, U.S. crude output is projected to surge by 870,000 bpd, reaching a record 12.78 million barrels. This is an upward revision from the previous month’s forecast, which predicted an 850,000-bpd increase. Looking ahead to 2024, the EIA anticipates a further increase in output, estimating a rise of 380,000 bpd to reach 13.16 million bpd.

In summary, the EIA’s report underscores the global impact of Saudi Arabia’s production cuts on oil reserves and prices. It also highlights the evolving landscape of U.S. crude production, emphasizing the need for careful monitoring and adaptation in the face of shifting market dynamics.

Invite you’re colleagues

Share this opportunity
Scroll to Top

Let us call you.

Please enter a name and mobile or phone number.