The U.S. Department of Energy lowers its forecast for Brent oil prices for the next two years, as well as lowering the GDP and oil production expectations for 2025

On Tuesday, August 6th, Eastern Time, the U.S. Energy Information Administration (EIA) lowered its oil price forecasts for 2024 and 2025 in its latest Short-Term Energy Outlook report, citing recent oil price declines due to economic concerns, but expecting prices to rebound in the coming months.

1) Downward Revision of Brent Oil Price Expectations for the Next Two Years

The EIA forecasts Brent crude oil prices to be $84 per barrel in 2024, lower than the previous forecast of $86, and $86 per barrel in 2025, also lower than the earlier prediction of $88. Meanwhile, the gasoline price expectation for 2024 remains unchanged at $3.40 per gallon, while the 2025 forecast has been revised down from $3.50 to $3.30.

For WTI crude oil prices, the EIA forecasts $80 per barrel in 2024 and $81 per barrel in 2025, both lower than the previous estimates.

2) Downward Revision of 2025 Oil Production Expectations

Additionally, the EIA maintained its forecast for U.S. oil production in 2024 at 13.2 million barrels per day and projected it to reach 13.7 million barrels per day in 2025, slightly lower than the previous forecast of 13.8 million barrels per day. For liquefied natural gas (LNG) exports, the EIA kept its 2024 and 2025 expectations at 12 billion cubic feet per day and 14 billion cubic feet per day, respectively.

3) Downward Revision of 2025 U.S. GDP Expectations

Furthermore, the EIA kept the U.S. GDP growth forecast for 2024 at 2.4%, while lowering the growth forecast for 2025 from 1.8% to 1.6%.

4) Downward Revision of 2025 Oil Demand Expectations

According to EIA data, the expected growth rate of U.S. oil demand in 2024 was revised up to 200,000 barrels per day, while the growth rate for 2025 was revised down from 290,000 barrels per day to 180,000 barrels per day. The global oil demand growth rate is expected to remain at 1.1 million barrels per day in 2024, but is projected to decrease from 1.8 million barrels per day in 2025 to 1.6 million barrels per day.

5) Further Reduction in Oil Inventories in the Second Half of the Year

The EIA report noted that global oil inventories decreased by approximately 400,000 barrels per day in the first half of this year, and it is expected that inventories will further decrease by around 800,000 barrels per day in the second half of the year.

The EIA will release the next Short-Term Energy Outlook report on September 10th, when forecasts may be further adjusted based on new economic data and market conditions.

On Tuesday, oil prices rebounded after hitting a six-month low yesterday, as the market prepared for escalated tensions in the Middle East, while a rebound in the financial markets eased concerns about oil demand prospects. WTI September crude oil futures rebounded from $72.94 per barrel yesterday to $73.20 per barrel, with an intraday increase of nearly 0.36% or $0.26. Brent October crude oil futures rebounded from $76.31 per barrel yesterday to $76.48 per barrel, with an intraday increase of over 0.22% or $0.17.

Oil prices edged slightly higher on Tuesday, with U.S. oil staying above $73