U.S. Energy Agency Hikes Oil Price Forecast for 2026
The U.S. Energy Information Administration (EIA) has revised up its average oil price forecast for this year but expects oil prices in 2026 to be lower than in 2025 as global oil production exceeds demand, leading to inventory builds.
In its Short-Term Energy Outlook (STEO) released late Tuesday, the EIA raised its average Brent crude price forecast to $55.87 per barrel, up from $55.08, while West Texas Intermediate (WTI) was revised to $52.21 per barrel from $51.42.
The agency expects oil prices to decline in 2026 to roughly 19% below 2025 levels, “as global oil production exceeds global oil demand, causing oil inventories to rise,” EIA said.
For 2027, EIA projects Brent crude to average $54.02 per barrel and WTI to average $50.36 per barrel.
The agency said that strong growth in crude oil production and rising volumes of oil accumulated in offshore and floating storage have overshadowed the potential impact of geopolitical risks stemming from Russia and Venezuela on exports.
This trend led to a rapid increase in global oil inventories in the second half of 2025, while stock builds are expected to continue in 2026 and 2027.
China’s continued buildup of strategic oil reserves stands out as a balancing factor for prices. A significant portion of global inventory increases in 2025 flowed into China’s strategic reserves, creating a demand-like effect that limited sharp price declines.
China is expected to maintain stock increases at just under 1 million barrels per day (bpd) in 2026, before slowing the pace in 2027.
On the supply side, OPEC+ production this year is estimated to remain about 900,000 bpd below current targets on average. The group confirmed its decision to keep production steady in the first quarter of 2026, while no production increase is expected in 2027 due to anticipated high inventory levels.
Venezuela remains one of the most significant sources of uncertainty in the outlook. Sanctions and tanker interventions are estimated to have disrupted around 600,000 bpd of the country’s oil exports, alongside related production shut-ins.
A potential easing of sanctions or a shift in US policy is assessed to increase downward pressure on oil prices in an already oversupplied market. US crude oil output is forecast to average 13.59 million bpd in 2026, up from the 13.53 million barrels projected in the previous report.
For 2027, production is expected to average 13.25 million bpd. Meanwhile, global oil production for this year is forecast to average 107.65 million bpd and consumption is estimated to reach 104.82 million bpd.
In 2027, global supply is expected to reach an average of 108.18 million bpd, with consumption rising to 106.09 million bpd. First HoldCo Names New Boards in Non-Banking Subsidiaries
