Crude oil is an important commodity traded around the world, and its price varies daily from country to country and state to state.
On Thursday, Brent crude opened at $82 a barrel on international exchanges. On the New York Mercantile Exchange, 30-day crude opened at $78 a barrel. And thousands of leases across the U.S. are buying crude at somewhat less than the NYMEX price, depending on quality and availability.
The future availability, or supply, of oil is important, so governments have agencies that look at the economy and forecast how much oil will be produced and consumed next month, next year or even 10 years into the future.
The Energy Information Administration was established by the U.S. Congress nearly 50 years ago to track energy production and consumption, and has a reputation for providing accurate data on past production and consumption. However, predicting the future is a bit more difficult, but it is expected to do so.
This week, the EIA projected that U.S. crude oil production will increase 2% from 2023 to an average of 13.2 million barrels per day per year in 2024, then grow another 4% to 13.7 million barrels per day in 2025.
“Production growth was led by the Permian region, which accounts for about 50 percent of domestic crude oil production, followed by the Eagle Ford and Gulf of Mexico federal regions,” EIA said in its monthly release.
The EIA expects OPEC+ to begin easing its voluntary production cuts in the fourth quarter of this year, which will continue to draw down global oil inventories and put upward pressure on oil prices. The EIA forecasts Brent crude prices at $84 for the remainder of the year.
The International Energy Agency and the Organization of Petroleum Exporting Countries are two other organisations that track energy supply and demand globally, but their opinions often differ.
The IEA predicts global oil demand will peak by 2030, but OPEC argues that global demand will grow.
The IEA predicts demand will weaken due to the development of wind and solar power and the continued use of electric vehicles.
OPEC believes that global demand will increase as developing countries experience economic growth and demand for oil production increases.
As you can see, there are a variety of opinions about future supply and demand.
Alex Mills is a former president of the Texas Federation of Energy Producers.
