In its latest short term energy outlook (STEO), which was released on December 9, the U.S. Energy Information Administration (EIA) increased its Brent price forecast for 2025 and 2026 but still projected that the commodity will drop next year compared to 2025.
According to its December STEO, the EIA now sees the Brent spot price averaging $68.91 per barrel this year and $55.08 per barrel next year. In its previous STEO, which was released in November, the EIA projected that the Brent spot price would average $68.76 per barrel in 2025 and $54.92 per barrel in 2026. The EIA’s October STEO forecast that the commodity would average $68.64 per barrel this year and $52.16 per barrel next year, and its September STEO saw the commodity coming in at $67.80 per barrel in 2025 and $51.43 per barrel in 2026.
A quarterly breakdown included in the EIA’s latest STEO projected that the Brent spot price will average $63.10 per barrel in the fourth quarter of this year, $54.93 per barrel in the first quarter of next year, $54.02 per barrel in the second quarter, $55.32 per barrel in the third quarter, and $56.00 per barrel in the fourth quarter of 2026. The commodity averaged $75.83 per barrel in the first quarter of this year, $68.01 per barrel in the second quarter, and $69.00 per barrel in the third quarter, the EIA’s December STEO showed. It also pointed out that the Brent spot price averaged $80.56 per barrel overall last year.
In its December STEO, the EIA highlighted that the Brent crude oil spot price averaged $64 per barrel in November, which it pointed out was $11 per barrel lower than in November 2024.
“Crude oil prices continue to fall as growing crude oil production outweighs the effect of increased drone attacks on Russia’s oil infrastructure, and the latest sanctions on Russia’s oil sector,” the EIA said in its latest STEO.
“We forecast that growing global oil production and lower demand over the winter will accelerate the accumulation of oil inventories, resulting in further crude oil price declines in the coming months,” the EIA warned.
“We forecast that the Brent price will drop to an average of $55 per barrel in the first quarter of 2026 (1Q26) and will stay near that price for the rest of the year,” it added.
In the STEO, the EIA noted that strong global oil production growth has outpaced consumption in recent months. It outlined that this trend “dr[ove]…” their “assessment that global oil inventories have risen quickly in the second half of 2025”.
“In 2026, we expect production and consumption to grow at similar rates, but production levels will continue to exceed consumption, further adding to inventories,” the EIA said in its December STEO.
The EIA projected in its latest STEO that global oil inventory builds will exceed two million barrels per day in 2026, which it said “is similar to this year’s increase”.
“Persistent inventory builds could fill commercial storage options on land, which may prompt market participants to increasingly seek other, more expensive options for storing crude oil, such as floating storage,” the EIA warned in the STEO.
“As a result, some of the crude oil price declines will likely reflect the higher marginal cost of storage,” it added.
The EIA went on to state in its December STEO that, although it expects prices to fall in 2026, it assessed that both OPEC+ policy and China’s continued inventory builds will limit declines.
“Given our expectation of substantial global oil inventory builds, we forecast OPEC+ will produce about 1.3 million barrels per day less than targeted production in 2026,” the EIA said in the STEO.
“On November 30, OPEC+ reaffirmed plans to keep production flat in the first quarter, but left open the potential for future adjustments,” it pointed out.
“A large portion of oil inventory builds this year have been in strategic stockpiles in China, which has limited downward price pressures. We expect that China will continue building strategic stockpiles into 2026,” the EIA continued.
Rigzone has contacted the Department of Information and Press of the Russian Ministry of Foreign Affairs, the Ministry of Energy of the Russian Federation, OPEC, the State Council of the People’s Republic of China and the State Council Information Office, and the International Press Center of China’s Ministry of Foreign Affairs for comment on the EIA’s STEO. At the time of writing, none of the above have responded to Rigzone.
To contact the author, email andreas.exarheas@rigzone.com
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