The U.S. Vitality Info Administration (EIA) reduce its Brent spot common crude oil worth forecast for 2025 and 2026 in its newest quick time period power outlook (STEO), which was launched on August 12.
In response to that STEO, the EIA sees the Brent spot worth averaging $67.22 per barrel this yr and $51.43 per barrel subsequent yr. In its earlier STEO, which was launched in July, the EIA projected that the Brent spot worth would common $68.89 per barrel in 2025 and $58.48 per barrel in 2026.
The EIA revealed in its newest STEO that it sees the Brent spot worth common coming in at $67.40 per barrel within the third quarter of this yr, $58.05 per barrel within the fourth quarter, $49.97 per barrel within the first quarter of subsequent yr, $49.67 per barrel within the second quarter, $52 per barrel within the third quarter, and $54 per barrel within the fourth quarter.
- Advertisement -
In its earlier July STEO, the EIA projected that the Brent spot worth would common $68.02 per barrel within the third quarter of 2025, $64.02 per barrel within the fourth quarter, $60 per barrel within the first quarter of 2026, $59 per barrel within the second quarter, $58 per barrel within the third quarter, and $57 per barrel within the fourth quarter.
Each STEOs highlighted that the Brent spot worth averaged $80.56 per barrel in 2024.
“Important development in oil provide will trigger crude oil costs to fall within the coming months,” the EIA warned in its August STEO.
“In our forecast, the Brent crude oil spot worth falls from $71 per barrel in July to $58 per barrel in 4Q25 and $49 per barrel in March and April 2026,” it added.
“On August 3, OPEC+ members once more agreed to speed up their scheduled manufacturing will increase. The two.2 million barrels per day of manufacturing cuts introduced in November 2023 and initially scheduled to be totally unwound by September 2026 will now be totally unwound by September of this yr,” the EIA identified in its STEO.
“We count on this enhance will contribute to massive stock builds by way of 2026, placing important downward stress on oil costs,” it continued.
In its STEO, the EIA stated it now forecasts world liquid fuels manufacturing will rise by 2.0 million barrels per day on common within the second half of 2025, in contrast with the primary half of the yr.
“OPEC+ will contribute half of this enhance. Non-OPEC producers led by the US, Brazil, Norway, Canada, and Guyana present the opposite half,” the EIA stated within the STEO.
“On the similar time, we count on world liquid fuels demand in 2H25 might be up 1.6 million barrels per day from the primary six months of the yr, which means the tempo at which oil is put into stock will speed up by virtually 0.5 million barrels per day in 2H25,” it added.
“With inventories already constructing at a charge of 1.4 million barrels per day in 1H25, we now count on inventories will construct by 1.9 million barrels per day in 2H25 and a couple of.3 million barrels per day within the first quarter of 2026,” it continued.
“Throughout comparable durations when world stock builds exceeded a million barrels per day for a sustained time interval – together with 2020, 2015, and 1998 – crude oil costs declined by 25 % – 50 % from the earlier yr,” it went on to state.
The EIA famous in its August STEO that stock builds of this dimension will trigger market individuals to hunt more and more costly choices for storing crude oil.
“As accessible business storage on land fills, different strategies comparable to floating storage or strategic inventory constructing is likely to be more and more used to match massive imbalances between provide and demand,” the EIA stated.
“On this case, crude oil costs will fall to replicate the upper marginal price of storage,” it identified.
The EIA went on to state in its STEO that it expects that costs dropping under $50 per barrel will trigger some producers to scale back provide.
“Notably, we count on that OPEC+ will cut back crude oil manufacturing by 0.2 million barrel per day in 2026 in contrast with 4Q25. Some non-OPEC nations that depend on provide from short-investment cycles may even see oil manufacturing drop,” the EIA stated.
“Most notable amongst these nations is the US, the place we count on annual common crude oil manufacturing in 2026 will lower 0.1 million barrels per day on common from the document in 2025,” it added.
Falling oil costs may even trigger a small enhance in demand in 2026, the EIA famous in its August STEO.
“Mixed with the slowdown in provide, we count on stock builds will reasonable barely. Stock builds in our forecast fall to close a million barrels per day in 2H26, which we count on will push the Brent worth again to a mean of $54 per barrel in 4Q26,” it added.
The EIA warned in its STEO that “important uncertainty” remains to be current in its worth forecast.
A report despatched to Rigzone on Tuesday by the Commonplace Chartered group confirmed that Commonplace Chartered is projecting that the ICE Brent close by future crude oil worth will common $61 per barrel in 2025 and $78 per barrel in 2026.
In that report, the corporate predicted that the commodity will common $65 per barrel within the fourth quarter of 2025, $71 per barrel within the first quarter of subsequent yr, $76 per barrel within the second quarter, $81 per barrel within the third quarter, and $83 per barrel within the fourth quarter.
A J.P. Morgan analysis word despatched to Rigzone by the JPM Commodities Analysis group on Monday confirmed that J.P. Morgan sees the Brent crude worth averaging $66 per barrel this yr and $58 per barrel subsequent yr.
J.P. Morgan projected in that word that the commodity will common $63 per barrel within the third quarter, $61 per barrel within the fourth quarter, $55 per barrel within the first quarter of subsequent yr, $57 per barrel throughout the second and third quarters, and $60 per barrel within the fourth quarter.
To contact the creator, e mail andreas.exarheas@rigzone.com
