EIA warns about decrease in world petroleum reserves

The US Energy Information Administration (EIA) predicted that world petroleum reserves will decrease in the fourth quarter of this year following the three-month extension of Saudi Arabia’s voluntary production cuts.

In its monthly report, the EIA announced that after the voluntary reduction of Saudi Arabia’s production by one million barrels per day, which was supposed to end at the end of September, but was extended until the end of 2023, the world’s petroleum reserves are expected to decrease by 200 thousand barrels per day in the third quarter.

Meanwhile, the EIA increased its forecast of global petroleum demand growth in 2023 by 50,000 barrels per day to 1.81 million barrels per day. However, the administration lowered its forecast for petroleum demand growth in 2024 by 250,000 barrels per day to 1.36 million barrels per day.

According to the report of the EIA, the reduction in global petroleum reserves will bring the price of Brent oil to an average of $93 per barrel in the fourth quarter, which is higher than the average price of $86 in August.

According to the administration’s forecast, the average price of Brent oil will decrease to $87 by the second half of 2024, when reserves will increase.

Joe DeCarolis, director of the EIA, also announced in a statement: “High oil prices combined with uncertain economic conditions could lessen global demand for petroleum products through 2024.”

Petroleum production in the United States is expected to increase by 870,000 barrels per day in 2023 and reach a record 12.78 million barrels per day, which is higher than the 850,000 barrels growth forecast in the administration’s report last month. Also, it is expected that US petroleum production will increase by 380,000 barrels per day in 2024 and reach 13.16 million barrels per day.

The EIA announced that total US petroleum consumption is expected to increase by 100,000 barrels per day in 2023 and reach 20.1 million barrels per day, which is lower than previously forecast. It is expected that consumption will grow by 200 thousand barrels per day next year and reach 20.3 million barrels per day.

According to Reuters, the administration cut its forecast for US gasoline consumption next year by 200,000 barrels per day to 8.7 million barrels per day. This revision was made after the US Census Bureau revised the country’s population estimates, and thus, the population of working-age people decreased and the population of retired people, who are less inclined to drive, increased.