U.S. crude oil prices rose slightly on Tuesday after the U.S. Energy Information Administration raised its global oil demand growth forecast for 2024, while OPEC maintained its forecast of relatively sturdy growth this year.

In my latest short-term energy forecastThe U.S. Energy Information Administration raised its forecast of growth in global oil demand in 2024 to 1.1 million bbl/day from the previous estimate assuming an escalate of 900,000. bbl/day while lowering its 2024 benchmark oil price estimates by ~4%.

The EIA said it forecast an average Brent crude price of $84.15/bbl in 2024 in 2024, up from its previous forecast of $87.79/bbl, and WTI averaging $79.70/bbl compared to its previous forecast of $83.05, but forecasts Brent crude prices rising to $85/bbl over this period in the second half of the year as OPEC+ extends voluntary production cuts into the third quarter.

“While oil prices initially declined following the OPEC+ announcement, we expect that the extension of all voluntary cuts through Q3 2024 will result in a further decline in global oil stocks through Q1 2025 and put upward pressure on oil prices over this period,” she said EIA in its report.

Meanwhile, OPEC+ stated in its Monthly report which continues to forecast oil demand growth this year at 2.2 million bbl/day and next year at 1.8 million bbl/day, unchanged from last month’s forecasts, with non-OPEC+ supply will escalate by 1.2 million bbl/day in 2024 and 1.1 million bbl/day in 2025, both the same as estimated in May.

Nymex (CL1:COM) pre-month crude oil supply closed in July +0.2% to USD 77.90/bbl, and the August Brent crude oil price (CO1:COM) closed +0.3% to USD 81.92/bbl.

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Morgan Stanley analysts say they expect Brent crude oil prices to rise will escalate by about $5 a barrel this summer however, he cautioned that the trend of tightening supply over the next three months will give way to surpluses at the end of 2024 and in 2025.

As the third quarter ends, the bank sees seasonal unfavorable trends turning into seasonal headwinds, noting that demand for refined products tends to decline by an average of 3.9 million barrels per day from September to January, hampering economic recovery.

Morgan Stanley’s Brent crude price chart shows $86 per barrel in the third quarter, reduced to $85 per barrel in the fourth quarter, before falling to $81 per barrel in early 2025 and $76 by the end of next year.

Morgan Stanley analysts believe that without further action from OPEC+, there will be a “sustainable” surplus in 2025.