The U.S. Energy Information Administration (EIA) raised its expectations for the oil market in its Short-Term Energy Outlook report for September. The agency increased its forecast for the average price of a barrel of Brent crude this year from $86.81 to $91.01.
The average price of Brent crude, used as an international benchmark, was $91 in August, marking a monthly increase of $7. Limited oil exports from the Middle East and an increase in production disruptions in the region were among the main factors behind the price rise.
Declining inventories expected to support prices
The EIA forecasts that global oil inventories will decline by approximately 400 million barrels this year. The decrease in inventories is expected to continue through the end of the year and help keep oil prices at elevated levels.
The forecast for the average price of a barrel of West Texas Intermediate (WTI) crude this year was also raised from $80.88 to $84.65.
Oil prices expected to decline in 2027
The agency also revised its 2027 forecasts upward. The average price of a barrel of Brent crude is expected to be $73.74, while the average price of a barrel of WTI crude is projected to be $69.74. In the previous report, these figures were given as $69.39 for Brent and $65.39 for WTI.
Despite raising its forecasts, the EIA says the downward trend in oil prices will continue in 2027. As oil exports from the Middle East gradually increase, most production disruptions end in the second half of 2027 and global inventories begin to rise again, the average price of Brent crude is expected to fall to $67 in the second half of the year.
Oil flows through the Strait of Hormuz and alternative routes are expected to increase price volatility in the short term.
Global increase in production expected
Global oil production is expected to average 100.62 million barrels per day this year and 109.88 million barrels per day in 2027. The increase in production next year is expected to be driven by the end of disruptions in the Middle East, as well as increased supply from other producing countries.
U.S. crude oil production is also expected to reach an average of 13.83 million barrels per day this year and 14.26 million barrels per day in 2027.
