EIA cuts Brent price forecast to $61/bbl for 2025
Global oil production is set to exceed annual demand and drive up oil inventories this year, the EIA said in its latest oil market report.
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The US Energy Information Administration (EIA) projects that the Brent crude spot price will average around $61/bbl by the end of this year – about $5/bbl lower than its previous forecast.
The EIA has also revised its 2026 forecast down by $7/bbl to an average of $59/bbl.
The revised forecasts come after OPEC+ producers announced they will increase their combined output beyond previously slated levels. Earlier this month, the coalition agreed to collectively increase supply by 411,000 b/d in July over June levels.
Crude oil prices fell for a fourth consecutive month in May, the EIA said.
Coming supply glut
“Global oil production will exceed consumption over the forecast period, causing global oil inventories to build and putting downward pressure on oil prices,” the energy agency said in its May short-term energy outlook (STEO) report.
However, supply can be disrupted by events like the Canadian wildfires around major oil sand fields in Alberta, tighter sanctions on Russian, Venezuelan and Iranian oil, as well as another potential force majeure on Libyan oil exports, the EIA noted.
“Significant uncertainty remains in our price forecast. Although we do not currently forecast any major supply disruptions, oil supply risks remain,” the agency added.
Supply and demand estimates
Growing oil production by OPEC+ members will lead to an average increase of 400,000 b/d in global oil inventories in 2025 and accelerate to 800,000 b/d on average in 2026, the US agency said.
Global liquid fuels and petroleum production is expected to increase by 1.6 million b/d to reach about 104.4 million b/d in 2025, about 200,000 b/d higher than the previous estimate, the EIA said.
Countries that are not part of the OPEC+ agreement will also contribute to the global liquid fuels production growth in 2025 and 2026, it added.
US crude oil production is forecast to decline from an all-time high of 13.5 million b/d in the second quarter of 2025 to about 13.3 million b/d by the end of 2026 as a result of declining oil prices and fewer active drilling rigs.
US crude oil production is projected to average a bit more than 13.4 million b/d in 2025 and a bit less than 13.4 million b/d in 2026.
OPEC+ crude oil production will grow by 300,000 b/d this year, against a decrease of 1.4 million b/d in 2024. It will further increase by 500,000 b/d in 2026, the US-based agency projects.
The Saudi Arabia-led producers’ group will drive output growth next year, as non-OPEC+ growth plunges, with production from Brazil, Guyana and Canada being partly offset by a drop in US crude oil output.
The US energy agency forecasts global oil demand to grow by 800,000 b/d in 2025, to average 103.5 million b/d, which would be about 200,000 b/d less than its previous estimate. In 2026, global oil demand is projected to rise by 1.1 million b/d, to average 104.6 million b/d.
A slowdown in global oil demand growth would weigh on prices, according to market analysts.
By Aparupa Mazumder
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