EIA: Oversupply and Economic Uncertainty Impact Oil Prices

The US Energy Information Administration confirmed that perceptions of oversupply in the oil market, due to increased OPEC+ production and uncertainty about the economic impact of tariffs, contributed to short-term oil price volatility.

In its report released today, the administration projected that alliance supply would rise by approximately 200,000 barrels per day this year, reaching 42.9 million barrels per day, compared to the previous estimate of 42.8 million barrels per day.

Regarding US oil production, the administration forecasts it to average 13.42 million barrels per day this year, a record low compared to the previous forecast of 13.51 million barrels per day.

In its Short-Term Energy Outlook, the administration indicated that the impact of new or additional tariffs on global economic activity and related demand remains highly uncertain, which could negatively impact future oil prices. It added that production will rise next year to 13.49 million barrels per day, down from its previous forecast of 13.56 million barrels per day.

It indicated that US West Texas Intermediate crude oil prices will average $61.81 per barrel this year, a decrease of more than $2 per barrel from its previous forecast.

The agency lowered its 2025 Brent crude price forecast to $65.85 per barrel, from $67.87 per barrel.