Commodities Buzz: EIA says Brent spot price will gradually fall to an average of $77 per barrel in fourth quarter of 2027
The US Energy Information Administration or EIA has stated in a latest monthly update for Oct-26 that Crude oil prices rose for a third consecutive month in October as falling global inventories, attacks on oil tankers in the Persian Gulf, constrained shipping capacity, and higher transportation costs tightened supply. Amid these conditions, it expects the Brent crude oil spot price will remain near $100 per barrel (b) for the remainder of this year. EIA assumes most Middle East production outside Iran to return to pre-conflict averages by the middle of next year. As depleted global oil inventories build throughout next year, EIA forecast the Brent spot price will gradually fall to an average of $77/b in the fourth quarter of 2027.
It expects the US average retail price of gasoline and diesel to decline in 2027; we raised our forecast for those prices from last month’s outlook. In the forecast, the US retail diesel price averages $5.03 per gallon (gal) next year, 12% higher than EIA forecast in previous month. Gasoline prices average $3.73/gal, 5% higher than last month. EIA assumes global petroleum product markets will face continued supply constraints through the end of 2027. These market conditions will support wider petroleum product crack spreads next year and incentivize elevated US refinery operations.
EIA has noted that global oil inventories fell by an average of 1.2 million b/d in the third quarter of 2026 (3Q26) but will begin building in 4Q26. It stated further that although global oil production will outpace consumption in 4Q26, the heightened risk of supply disruptions and longer shipping routes will limit the near-term impact of global stock builds until geopolitical risk dissipates and inventories begin to return closer to pre-conflict levels. It assumes export workarounds from the Middle East such as pipeline and overland bypass routes, ship-to-ship transfers, and new pipeline capacity expected to come online in 2027 in the United Arab Emirates will lead to shut-in volumes gradually falling through the Short-Term Energy Outlook forecast period.
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