View financial news and market trends on East Fortune, and choose East Fortune Securities for one-stop account opening and trading. On Tuesday (December 10th) local time, the U.S. Energy Information Administration (EIA) released its Short-Term Energy Outlook report, forecasting a slight supply shortage in the global oil market for the coming year. The EIA estimates that by 2025, global oil consumption will reach 104.
3 million barrels per day, with production at 104.2 million barrels per day, resulting in a daily consumption surplus of 100,000 barrels over production; last month, the EIA predicted 104.4 million barrels per day for consumption and 104.7 million barrels per day for production, with a difference of 300,000 barrels. Media analysis suggests that the EIA’s reduction in global production forecasts is partly due to OPEC+ member countries extending their voluntary production cut measures.
Last week, eight OPEC+ oil-producing countries decided to extend the voluntary production cut of 2.2 million barrels per day, which was due to expire at the end of the year, until the end of March next year. Investors are closely monitoring the balance of the oil market for the coming year, as weak demand and increased production outside of OPEC may keep oil prices within a range. Over the weekend, Saudi Arabia lowered the price of oil sold to Asian buyers, with a discount larger than expected, which could intensify bearish sentiment.
The EIA’s latest forecast predicts that the average price of U.S. WTI crude oil in 2025 will drop to $69.12 per barrel, and Brent crude to $73.58. A month ago, the EIA’s figures were $71.60 and $76.06, respectively. In comparison, the current prices are $68.57 per barrel for U.S. oil and $72.17 for Brent oil. A month ago, the American Petroleum Institute (API), the largest lobbying group in the oil industry, sent an open letter to the then President-elect Trump after he secured the White House, hoping that he would adopt the association’s policy roadmap, claiming it could ensure America’s energy leadership and help reduce inflation.
Soon after, Trump quickly announced the nomination of oil magnate Chris Wright as Secretary of Energy and North Dakota Governor Doug Burgum as Secretary of the Interior (North Dakota being one of the largest shale oil-producing states in the U.S.). Kevin Book, Managing Director of energy research firm ClearView Energy Partners, stated that Trump’s two selections indicate the new administration’s intention to significantly reduce regulations.
Book explained that both Burgum and Wright have connections with smaller independent oil and gas companies, which tend to prefer deeper deregulation, as compliance is more critical for them compared to larger companies.
Book suggests that the incoming Trump administration is advancing plans to further increase the United States’ share of the global oil and gas market, in competition with OPEC and other oil-producing nations. According to the latest report by the EIA, the United States’ oil production is projected to reach 13.52 million barrels per day by 2025, with 12.93 million barrels per day in 2023 and 13.24 million barrels per day in 2024. To trade stocks, one must first open an account! Choose Dongfang Fortune Securities, where market trends and trading can be managed through a single app.
