Global oil demand is set to grow next year at a lower rate than previously expected, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO) for October, as it slashed its Brent oil price forecasts for 2025 due to lower expected demand increase.

The EIA now expects global oil demand to grow by 1.3 million barrels per day (bpd) in 2025, due to downgraded forecasts of consumption in developed economies in the OECD.

In the September STEO, the EIA had projected global consumption of liquid fuels would increase by 1.5 million bpd in 2025.

In the October outlook, the administration reduced its forecast of total OECD oil consumption by 200,000 bpd in 2025 compared with last month’s STEO, as a result of weaker expectations for industrial production and manufacturing growth in the United States and Canada.

Most of the EIA’s expected global liquid fuel demand growth is from non-OECD countries where liquid fuels consumption is set to increase by 1.0 million bpd in 2024 and 1.2 million bpd in 2025. This would be in contrast to consumption in OECD countries, which is projected to fall by 100,000 bpd in 2024 before increasing by a similar amount in 2025.

For the U.S., the EIA cut its estimate of liquid fuel consumption to 20.49 million bpd in 2025, down from the September estimate of 20.64 million bpd.

In the October STEO, the EIA slashed its forecast for the Brent crude oil spot price through the end of next year. In this month’s outlook, the administration expects the Brent price will average $78 per barrel in 2025, which is $7 a barrel less than the forecast in last month’s STEO. Lower crude oil prices in the forecast “largely reflect a reduction for global oil demand growth in 2025,” the EIA said.

Early on Wednesday, Brent Crude prices were slightly down by 0.4% at $76.80.

Oilprice.com