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By Shariq Khan
NEW YORK (Reuters) -Oil costs can be underneath strain over the subsequent two years as world manufacturing development outpaces demand, the U.S. Power Data Administration mentioned on Tuesday in its Quick-Time period Power Outlook report.
Many analysts count on an oversupplied oil market this yr, after demand development slowed sharply in 2024 within the largest energy-consuming international locations: the U.S. and China.
The EIA mentioned it expects Brent crude oil costs to fall 8% to common $74 a barrel in 2025, then fall additional to $66 a barrel in 2026.
The EIA barely raised its estimate for report U.S. oil manufacturing this yr, to 13.55 million barrels per day, from its prior estimate of 13.52 million bpd.
U.S. crude costs are anticipated to common $70 per barrel in 2025 and fall to $62 per barrel subsequent yr, mentioned the EIA, the primary time it’s issuing an outlook for 2026.
The share of U.S. provide coming from the Permian Basin of Texas and New Mexico, the world’s largest shale oil-producing area, is anticipated to proceed to develop and account for greater than half of all the nation’s output in 2026, the report mentioned.
Globally, oil and liquid gas manufacturing is now anticipated to common 104.4 million bpd in 2025, up from the prior forecast of 104.2 million bpd, the EIA mentioned.
The EIA cited a choice by the Group of Petroleum Exporting International locations and allies to ease provide curtailments and expectations that non-OPEC producers will enhance output.
International demand, in the meantime, is anticipated to common 104.1 million bpd, down from the prior estimate of 104.3 million bpd, and nonetheless decrease than pre-pandemic traits, the EIA mentioned.
