West Texas Intermediate

Summary

The average annual price of WTI in 2023 was US$77.62 per barrel (bbl), a decrease of 18% from 2022.

In the base-price case, the WTI price is forecast to decrease to US$76.00/bbl in 2024, rebounding to US$77.00/bbl in 2025 and reaching US$83.63 by 2033.

The low-price case assumes lower demand for transportation fuels, with WTI to average US$46.47/bbl in 2024 and projected to be US$46.45/bbl in 2033.

The high-price case considers a rapid economic expansion, higher than anticipated global demand, and constrained supply, resulting in an average price of US$124.29/bbl in 2024 and projected to be US$150.54/bbl in 2033.

In 2023

U.S. production: The price of WTI decreased in 2023 due to rising global inventories and concerns about the global oil demand growth. U.S. oil production increased from 11.9 million barrels per day (bbl/d) in 2022 to a record 12.9 million bbl/d in 2023, reflecting an increase in well productivity as U.S. drilling activity declined throughout the year. Well productivity increased due to longer wellbore length, more fracturing, and optimizing well pad design.

OPEC+ supply management: In response to strong U.S. production growth, rising inventories, and a drop in oil prices, the actions of the Organization of the Petroleum Exporting Countries and its allied non-member countries (collectively referred to as OPEC+) reduced crude oil supply by about 1.4 million bbl/d in 2023, according to the U.S. Energy Information Agency (U.S. EIA). A combination of mandatory cuts by member states and additional voluntary cuts by Saudi Arabia and Russia enabled this reduction.

Forecast for 2024 to 2033

The near-term WTI price forecast is anticipated to be affected by demand-side factors, including a slowdown of global economic activity, stubborn inflation, and high interest rates. On the supply side, WTI prices will depend on OPEC+’s commitment to restrict supply, production growth in U.S., Brazil, Guyana, and Canada, and heightened geopolitical tensions in the Middle East caused by the Israel-Hamas conflict and the ongoing war in Ukraine. In 2025, global demand is expected to rebound with the resumption of global economic growth supported by lower interest rates by central banks. Crude oil production growth from non-OPEC+ countries is expected to keep a lid on further price gains. Overall, the market will be balanced by 2026 as demand for crude oil is expected to increase with supply.

The long-term forecast largely depends on the demand for petroleum liquid fuels. Despite advances in environmental policies, there is still uncertainty about the timing of a decline in global oil demand before the end of the forecast. Growing demand for feedstock in the petrochemical sector, particularly in developing economies, may offset the slowing demand for transport fuels.

U.S. oil production: U.S. production is projected to rise to new heights in 2024 and 2025, although the pace of growth is expected to be slower than in past years. Most of U.S. production growth has come from shale and tight plays in recent years. Wells producing in shale and tight plays have steep decline curves, requiring significant increases in new drilling to maintain production levels. However, according to the U.S. EIA, advances in horizontal drilling and hydraulic fracturing techniques have increased well productivity. These advancements enable U.S. producers to pump more crude oil from each new well drilled while maintaining production for longer from older wells.

Geopolitical tensions: Geopolitical tension remains a key uncertainty in the oil market due to the Israel-Hamas conflict and the ongoing war in Ukraine; consequently, the near-term WTI price is expected to remain volatile.

Low- and High-Price Cases

The low- and high-price cases are estimated using a 90% confidence interval. The following factors affect the WTI price cases:

Low-price case:

• Global oil demand declines more than expected due to a slowdown in economic activity.
• OPEC+ production exceeds the targets, increasing the global crude oil supply and inventories.
• U.S. shale production grows more than expected throughout the forecast period.
• Geopolitical tensions and conflicts subside and increase the global oil supply.

High-price case:

• Global oil demand rises more than expected due to an acceleration in economic growth.
• OPEC+ cuts production more than expected, reducing the global crude oil supply and inventories.
• U.S. shale production grows less than expected throughout the forecast period.
• Geopolitical tensions and conflicts continue to disrupt the global oil supply.

Learn More

• Methodology
• Data [XLSX]