USA EIA Reveals Latest Oil Price Forecast
by Andreas Exarheas | Rigzone Staff
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*this article was not written by Roseland Oil & Gas
The U.S. Energy Information Administration (EIA) revealed its latest oil price forecast for 2026 and 2027 in its July short term energy outlook (STEO), which was released on July 7 and completed its forecast on July 1.
According to the July STEO, the EIA now sees the Brent spot price averaging $81.91 per barrel this year and $64.76 per barrel next year. That marks a steep drop from its previous STEO, which was released in June and projected that the Brent spot price would average $95.39 per barrel in 2026 and $79.39 per barrel in 2027.
A quarterly breakdown included in the EIA’s latest STEO forecast that the commodity will come in at $74.03 per barrel in the third quarter of this year, $70.00 per barrel in the fourth quarter, $67.63 per barrel in the first quarter of next year, $65.66 per barrel in the second quarter, $64.02 per barrel in the third quarter, and $61.97 per barrel in the fourth quarter.
In its previous June STEO, the EIA projected that the Brent spot price would average $101.12 per barrel in the third quarter of 2026, $89.00 per barrel in the fourth quarter, $83.95 per barrel in the first quarter of next year, $81.00 per barrel in the second quarter, $78.00 per barrel in the third quarter, and $75.00 per barrel in the fourth quarter.
The U.S. Energy Information Administration revealed its latest oil price forecast for 2026 and 2027 in its July short term energy outlook.
“On June 18, the United States and Iran signed a memorandum of understanding (MOU) to end the conflict and open the Strait of Hormuz, which had been effectively closed since February 28 when the conflict began,” the EIA said in its July STEO.
“The closure of the strait, a major world oil transit chokepoint, significantly disrupted global oil flows resulting in oil price volatility,” it added, highlighting that the Brent crude oil spot price averaged $85 per barrel in June, which it pointed out was $22 per barrel lower than the average in May.
“Daily Brent crude oil spot prices have since fallen even further, dropping below $70 per barrel on July 1, similar to where prices were when the conflict began in late February,” the EIA said in its STEO.
“Following the signing of the MOU, reports indicate a significant uptick in tanker traffic moving through the region to both load and deliver crude oil and petroleum products,” it continued.
“The increase in oil flows through the strait has been a primary driver of downward pressure on oil prices in recent weeks,” it stated.
In its July STEO, the EIA noted that the ability of global oil markets to adjust trade flows and swiftly reduce oil demand exceeded its expectations in earlier STEO forecasts.
“Most of this demand reduction occurred in Asia, where countries were most reliant on imports of crude oil from the Middle East,” the EIA said.
“Other factors that helped moderate oil prices include the ability of some Persian Gulf oil producers to reroute supplies around the Strait of Hormuz, increased exports from crude oil producers outside of the Middle East (primarily in North and South America), and the release of strategic stocks from reserves in the United States and some OECD countries,” it added.
“With the resumption of oil flows”, the EIA revealed in its July STEO that it anticipated fewer disruptions to Middle East crude oil production than in its last forecast.
“We assess that production shut-ins averaged 8.3 million barrels per day in June after peaking at 11.2 million barrels per day in May,” it highlighted.
“We now expect most crude oil production and trade patterns to return to near pre-conflict levels by the end of this year, with an average of 1.4 million barrels per day of supply still shut-in in 4Q26 and the majority of shut-in crude oil production to be back online in 1Q27,” it added.
The EIA went on to state in its STEO that, “despite rising oil production and exports from the Middle East in the coming months, it will take time to replenish considerably reduced global oil inventories and for production in the region to fully recover”.
The organization revealed that it estimates that global oil inventories fell by an average of 5.1 million barrels per day in the second quarter of this year and will fall by an additional 2.2 million barrels per day in the third quarter.
“Inventory draws continue in 3Q26 because much of the increased tanker traffic is made up of previously stranded oil tankers both inside and outside of the strait,” the EIA said in the STEO.
“After this initial adjustment period, which will last for much of 3Q26, we expect that oil markets will return to the pre-conflict state of oversupply,” it projected.
The EIA forecast in the STEO that oil inventories will build by an average of 2.7 million barrels per day in the fourth quarter of this year and 5.0 million barrels per day in 2027.
“As supply grows faster than consumption, we expect downward pressure on oil prices for the remainder of our STEO forecast,” the EIA highlighted.
“We expect that Brent crude oil prices will fall from an average of $103 per barrel in 2Q26 to $70 per barrel in 4Q26, which is $19 per barrel lower than in our June STEO,” it added.
“Brent prices in our forecast average $65 per barrel in 2027, $15 per barrel lower than in our June STEO,” it continued.
“Restocking strategic and commercial reserves will attenuate this decline in price,” it went on to state.
The EIA’s latest forecast was completed prior to U.S. President Donald Trump saying he thought the ceasefire with Iran was over during a press meeting in Ankara, Türkiye, where he attended the 2026 NATO Summit.
by Andreas Exarheas | Rigzone Staff
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas