In its latest Short-Term Energy Outlook, the US Energy Information Administration (EIA) has predicted lower oil prices as supply to the market increases.
The EIA attributes this to the decision by OPEC+ members to speed up the rate at which they are reversing previous production cuts. It says this will cause an average inventory build of 2 million barrels per day (b/d) in the upcoming two quarters, compared to 1.2 million b/d in its previous outlook. The EIA previously said it expects Brent crude to be selling at $58 per barrel on average next year. The latest report lowers this to $51 and speculates that this price point will trigger OPEC+ and other producers to scale back production.
US shale operators like Chevron, the maker of the Texaco grease range, have been continuing to make productivity gains. The EIA expects this will lead to record production at the end of this year, before decreases in activity feed in and accelerate further in response to low prices:
“We expect increases in well productivity will push U.S. crude oil production to an all-time high near 13.6 million b/d in December 2025. However, as crude oil prices fall, we expect US producers will accelerate the decreases in drilling and well completion activity that have been ongoing through most of this year…”
It added that it now expects US crude oil production to average 13.4 million b/d and 13.3 million b/d for this year and next, respectively. It also predicts total US production dropping to 13.1 million b/d in the last quarter of 2026.
