The U.S. Energy Information Administration (EIA) projects that Libyan oil production will stabilize at 600,000 barrels per day for the rest of 2024. This forecast comes amid ongoing production disruptions in Libya, reported by the Libyan website “Al Wasat.” These disruptions have created further volatility in oil prices, leading the EIA to adjust its crude oil price predictions for next year.
Political instability in Libya, particularly disputes over the control of the Central Bank, is impacting oil extraction. Production has dropped significantly, from 1.1 million barrels per day to around 400,000 barrels by late August. According to Kpler, Libyan oil exports fell by approximately 81 percent last week. The crisis intensified when the eastern Libyan government, which the House of Representatives appointed but is not internationally recognized, declared force majeure on oil fields and ports. This decision followed the dismissal of Central Bank Governor Al Saddiq al Kabir by Tripoli authorities.
In response to these uncertainties, the EIA has revised its 2024 Brent crude oil price forecast to $82.80 per barrel. This adjustment reflects a slowing global economy and reduced oil demand. The forecast for West Texas Intermediate has also been lowered to $78.80 per barrel for next year. Despite these revisions, the EIA anticipates a short-term increase in oil prices due to higher global consumption than production. Key factors influencing future prices include strong demand from China and supply disruptions in the Middle East.
The EIA expects global crude oil inventories to decline, predicting a drop to 0.9 million barrels per day in the third quarter of 2024 and over a million barrels per day through the first quarter of 2025. As a result, Brent crude prices may average $82 per barrel in December and rise to $83 in early 2025.