U.S. oil production is expected to set a larger record this year than previously forecast, even as global oil supply outpaces fuel demand, the Energy Information Administration said in its Short-Term Energy Outlook report on Wednesday.
The Department of Energy’s statistical arm expects U.S. oil output to average 13.59 million barrels per day this year and then decline marginally to about 13.58 million bpd next year, the EIA said.
The agency had earlier forecast U.S. oil output would post a slightly steeper decline from about 13.53 million bpd in 2025 to 13.51 million in 2026.
It said the revisions to its forecasts were due to higher-than-expected production in August.
Oil output averaged 13.23 million bpd last year, which was the prior record.
Global crude oil and liquid fuels output is now expected to average 106 million bpd this year, the EIA said, up 100,000 bpd from its prior forecast.
Global consumption is now forecast to average 104.1 million bpd, also up by a similar amount as the production forecast.
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Global oil inventories will grow through 2026 as production is increasing faster than demand for petroleum fuels, the EIA said, expecting it to pressure crude oil prices.
Global crude oil stocks will rise to 2.93 billion barrels in the fourth quarter, up 52 million barrels from the third quarter, the EIA said.
Inventories will reach 3.18 billion barrels by the final quarter of next year, the agency said.
The changes to EIA’s monthly forecasts were mostly neutral, but the agency continues to point to a large market surplus this year and next, UBS analyst Giovanni Staunovo noted.
Global benchmark Brent crude is set to fall to an average of US$68.76 per barrel this year, from an average of US$80.56 last year, the EIA said.
U.S. West Texas Intermediate crude futures are expected to average about US$65.15 a barrel this year, down from US$76.60 last year.
Petroleum fuel prices will fall as the price of oil comes down.
U.S. retail gasoline prices are expected to fall to an average of US$2.98 a gallon next year, which would mark the first time prices have averaged less than US$3 a gallon since 2020.
Retail diesel prices will drop to US$3.50 per gallon in 2026, down over 4 per cent from this year, the EIA said.
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