indicatorThe Owl

Oil market expected to remain tight

Latest outlook from the U.S. Energy Information Administration is positive

By Rob Roach, ATB Economics 9 August 2023 1 min read

The U.S. Energy Information Administration (EIA) released its latest Short-Term Energy Outlook yesterday.

Overall, it’s good news for oil producers like Canada and Alberta with prices expected to rise and supply to remain tight even as production rises.

According to the new forecast, benchmark oil prices will continue to be supported by “voluntary cuts to Saudi Arabia’s crude oil production and increasing global demand.”

West Texas Intermediate (WTI) is forecast to average just under US$81 per barrel over the second half of 2023, or about 9% higher than in the EIA’s July Outlook.

The average price next year is currently pegged at US$81.48 compared to $77.78 as of the previous forecast (+4.7%).

This bodes well for the prices received by Alberta producers as the higher WTI benchmark will also lift the price of our oil.

Global crude oil and liquids production is forecast to average 101.3 million barrels per day (mb/d) in 2023, just a titch higher than in the July outlook (+0.2%) before rising to 103.0 mb/d in 2024.

Global consumption meanwhile, will keep markets tight, averaging 101.2 mb/d this year and 102.8 mb/d in 2024.

Even though domestic U.S. crude oil production is expected to rise in 2023 and 2024 to record levels, the total amount of crude and other liquids the U.S. will import is forecast to increase both this year and next.

Answer to the previous trivia question: At $10.3 billion, Saskatchewan led the provinces in terms of the dollar value of its international exports of agriculture products over the first half of 2023. Alberta was second at $6.5 billion.

Today’s trivia question: Between 2023 and 2030, what percentage of Canada’s total projected population growth will come from international migration?

The EIA's August outlook foresees a tight global oil market in 2024

The EIA's August outlook foresees a tight global oil market in 2024

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