US EIA: Oil prices will drop dramatically in the months ahead, as OPEC+ increases output

The U.S. Energy Information Administration's Short-Term Energy Outlook, released on Tuesday, said that global oil prices will drop in the months to come as OPEC+'s increased production will result in large oil inventories.

Brent crude, a global benchmark, will fall to an average price of $59 a barrel by the fourth quarter of 2025. This is down from $68 if you compare it to August. The EIA report was completed before the weekend's decision of the OPEC+ to increase output further in October.

The EIA stated that oil inventories would continue to rise by an average of 2.1 million barrels a day in the second half of 2025, and will remain high through next year.

The EIA stated that Brent crude prices will average $67.80 per barrel for the entire year, and U.S. West Texas intermediate crude futures should average $64.16 per barrel.

The EIA forecasts that global crude oil and fuel liquids will average 105.5 millions barrels per day in this year. This is up 100,000 barrels per day from their previous forecast. The EIA estimates that consumption will average 103.8 millions bpd in this year. This is also an increase of 100,000 bpd from previous forecasts.

The EIA has revised its forecast to 13.41 million barrels per day. This is up from the previous estimate of 13.44 million. Last year, the U.S. averaged 13.24 millions bpd in oil production.

The EIA reported that gasoline consumption in the U.S. is expected to increase to an average of 8.93 million bpd next year due to lower fuel prices, and revised official data which increased the number of Americans of working age in the country.

The EIA has predicted that gasoline consumption will fall by nearly 1% this year, to an average of 8.90 million barrels per day. (Reporting and editing by David Gregorio in New York, Shariq Khan is reporting from New York)

(source: Reuters)