Commodities Buzz: EIA says significant growth in global oil inventories to weigh on crude oil prices in coming months

EIA stated in its Short-Term Energy Outlook that in July, US crude oil production averaged more than 13.6 million b/d, the most in any month on record. Production in July was higher than we previously estimated, which raised the starting point for our US crude oil production forecast. It raised forecast for crude oil production in the Gulf of America as some projects are ramping up production faster than expected. EIA noted that although it expects crude oil production will decline from its recent peak as oil prices fall, the US crude oil production will average 13.5 million b/d in both 2025 and 2026. Our 2026 forecast increased by 0.2 million b/d from last month.

Brent crude oil spot prices averaged $68 per barrel (b) in September, unchanged from the average in August. EIA forecast that growing global oil supply and the transition away from peak summer seasonal demand will lead to significant growth in global oil inventories over the forecast, causing crude oil prices to fall in the coming months. Oil prices will fall to an average of $62/b in the fourth quarter of 2025 (4Q25) and $52 per barrel in the first half of 2026 (1H26). EIA expects inventory builds will average 2.6 million barrels per day (b/d) in 4Q25 and will remain elevated through 2026, putting significant downward pressure on oil prices.

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