Prices to Rise: EIA 2024 Energy Forecast

by | Aug 20, 2023 | Oil Prices, Crude, Demand, Energy, OPEC, Production, Supply, U.S. Energy Information Administration

Crude Oil Prices to Rise as Demand Outpaces Supply – The world of crude oil is once again taking center stage.

Crude Oil Prices to Rise as we move into 2024

Introduction: In a landscape driven by ever-shifting supply and demand dynamics, the world of crude oil is once again taking center stage. The Energy Information Administration (EIA) has presented a comprehensive outlook that sheds light on the trajectory of crude oil prices, production, and consumption. In this article, we’ll dive into the key takeaways from three EIA reports that provide valuable insights into the complex world of crude oil.

The EIA’s latest Short-Term Energy Outlook (STEO) projects a bullish path for crude oil prices through the second half of 2023 and into 2024.

This projection is anchored in the principle of inventory drawdowns – a phenomenon that occurs when the demand for a commodity exceeds its supply. Drawing parallels between production cuts by OPEC members and a forecasted surge in petroleum consumption, the EIA anticipates an average inventory drawdown of 0.4 million barrels per day (b/d) from July 2023 to the end of 2024.

oil prices to rise august 2023The Brent crude oil price, a globally recognized benchmark, is predicted to surge to the mid-$80 per barrel range by the conclusion of 2024. This marks a significant uptick from the average of $75 per barrel observed in June 2023. Following suit, the West Texas Intermediate (WTI) crude oil price is projected to mirror this trajectory while maintaining a discount of $5 per barrel relative to Brent.

The EIA attributes these upward price pressures to production cut extensions by OPEC+ members. Notably, Saudi Arabia, a key player in global oil production, announced a voluntary cut of 1.0 million b/d for July and August 2023. This concerted effort aims to curb excess supply and support price growth.

Global Production and Consumption Dynamics

The EIA’s forecast for petroleum consumption presents an intriguing interplay between growth and key regions. Non-OECD (Organization for Economic Co-operation and Development) countries are expected to spearhead consumption growth, with an estimated rise of 1.6 million b/d from 2022. This surge is anticipated to average 55.1 million b/d in 2023 and elevate further to 56.5 million b/d in 2024.

China and India are pivotal actors in this narrative, with the EIA’s projections highlighting their role as growth leaders. Consumption in China is poised to increase by 0.8 million b/d in 2023, followed by another 0.4 million b/d in 2024. Similarly, India’s consumption is anticipated to expand by 0.3 million b/d in both 2023 and 2024.

Evolving Models and Perspectives

While the EIA’s STEO provides invaluable insights into the short-term landscape, a pivotal aspect of their mission involves the long-term projection of the U.S. energy system. Recognizing the need to align with dynamic shifts in the energy sector, the EIA has embarked on an ambitious journey to enhance their modeling capabilities.

The National Energy Modeling System (NEMS), responsible for generating the Annual Energy Outlook (AEO), is undergoing substantial updates to accommodate emerging technologies like hydrogen and carbon capture. However, these enhancements necessitate significant time and resources, leading to the decision not to publish an AEO in 2024.

This strategic pause is not without purpose; it’s geared towards developing a flexible, next-generation modeling framework that aligns seamlessly with the ever-evolving U.S. energy sector. The upcoming AEO in 2025 is poised to comprehensively address prevailing laws, regulations, and provisions.

Revisiting Projections and Embracing Change

As the U.S. and global energy landscape continues to evolve, the EIA is committed to recalibrating its forecasts to provide stakeholders with reliable and timely information. The August STEO has highlighted the need for ongoing monitoring, as the forecasted Brent crude oil price has been revised upwards to $86/bbl in the second half of 2023, reflecting a $7/bbl increase from the previous projection.

This revision is a response to multiple factors, including Saudi Arabia’s extended production cuts and surging global demand. Non-OECD Asia, led by China and India, emerges as a key driver of global liquid fuels consumption growth, while non-OPEC producers contribute to a forecasted increase in liquid fuels production.


The EIA’s comprehensive insights underline the delicate balance between supply and demand in the world of crude oil. As OPEC+ maneuvers to regulate production and global consumption patterns evolve, the trajectory of crude oil prices in the coming years remains a focal point for both industry players and global decision-makers. This intricate dance between supply, demand, and evolving modeling capabilities will shape the energy landscape for years to come.

Sound interesting?

Let’s talk more about the recent EIA forecasts and why high net-worth investors, like yourself, and paying closer attention to crude oil prices as we venture into 2024.

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