EIA expects Brent oil to fall below $60/bbl by Q4
The U.S. Energy Information Administration forecast Brent crude oil spot price will average less that $60 per barrel during the fourth quarter. This would be the lowest average price since 2020.
In its August Short Term Energy Outlook, it stated that it expects Brent to be around $50 per barrel by 2026. The global benchmark closed Tuesday at just over $66.
The U.S. Department of Energy's statistical arm forecasted a significant drop in oil prices, as the growth of global oil supply vastly exceeds the growth of demand for petroleum-based products.
There's a great deal of uncertainty on the petroleum market. We have seen oil prices drop significantly in the past when inventories grew as rapidly as we expect in the next months", said EIA acting administrator Steve Nalley.
The EIA predicts that U.S. crude oil production will reach a record 13,41 million barrels a day in 2025, due to an increase in well productivity. However, lower oil prices in 2026 will cause a decline in output.
The EIA predicts that lower oil prices will result in lower U.S. gasoline and diesel prices and will reduce domestic oil production from its record highs of 2025. (Reporting by Anjana Anil in Bengaluru Editing by Marguerita Choy)
(source: Reuters)
