EIA Cuts World Oil Demand Growth For 2023

The U.S. Energy Information Administration has slashed its world oil demand growth forecast for next year as President Biden lashed out at oil companies for not expanding supply, and as OPEC+ moved last month to cut production targets by 2 million bpd.

The EIA has cut its 2023 world oil demand growth forecast by 320,000 barrels per day, to 1.16 million bpd, while raising 2022 oil demand growth by 140,000 bpd, to 2.6 million bpd, according to its Short-Term Energy Outlook published on Tuesday.

The EIA expects global oil inventories to begin to fall again early in 2023, after what it sees as a 0.8 million bpd growth in Q3 2022, and a 0.2 million bpd growth in Q4 this year. For 2023, the EIA sees global oil inventories falling by 1.2 million bpd in the first quarter next year,  for an average 300,000 bpd loss for the full year 2023.

The Biden Administration this week pledged to approve “no more drilling” for oil in the United States, while OPEC+ has moved to scale back its production targets by 2 million bpd. The EIA’s STEO sees U.S. crude oil production averaging 11.83 million bpd this year, and 12.31 million bpd next year. The EIA also sees OPEC’s crude oil production falling in November and December. For 2023, the EIA sees OPEC’s full 2023 production averaging 28.9 million bpd, up 300,000 bpd from this year.

Its predictions for the price of a Brent barrel for next year is an average of $95.33, down from an average $102.13 across 2022, due to the “growth in OPEC and non-OPEC oil production—most notably production in the United States. The EIA does see Brent barrel prices rising into the second half of next year.

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