Despite the expectation that oil supply and exports in the Middle East will gradually increase, the US Energy Information Administration (EIA) revised its oil price forecasts upwards due to the fact that supply disruptions in the region reduced global oil stocks and the congestion in diesel markets.
According to EIA's "Short-Term Energy Outlook" report for October, the barrel price of Brent type crude oil, which is considered the international reference, was 114 dollars on average in September. This figure was 23 dollars above the August average.
While the report predicts that the spot price of Brent oil will be $105 per barrel on average in the fourth quarter of this year, this forecast is $14 higher than predicted in last month's report.
It is stated that the upward revision in the price forecast is due to the supply disruptions in the Middle East causing a decrease in global oil stocks and the tightness in diesel markets keeping prices high.
However, EIA estimates that global oil stocks decreased by an average of 1.9 million barrels per day in the third quarter of the year, and expects them to decrease by an average of 700 thousand barrels per day in the fourth quarter.
In this regard, the average barrel price of Brent oil is expected to be at 96.32 dollars this year. In EIA's previous report, this price was estimated at approximately $91.
The average barrel price of West Texas type (WTI) crude oil is expected to be at $88.21 this year. In last month's report, this price was stated as $ 84.65.
EIA also revised its oil price forecasts for 2027 upwards compared to the previous report.
The average barrel price of Brent oil is expected to be 83.74 dollars in 2027, and the average barrel price of WTI oil is expected to be 79.74 dollars. Last month, $73.74 was predicted for Brent oil and $69.74 for WTI.
On the other hand, EIA maintains its expectation that oil prices will trend downward next year, despite the upward revision.
Accordingly, oil production and exports in the Middle East are expected to gradually increase with greater use of alternative routes and ship-to-ship transfers. Most of the region's oil production is projected to return to pre-conflict average levels by the end of the second quarter of 2027.
With these developments, it is estimated that the spot price of Brent oil will decrease to an average of 87 dollars per barrel in the second quarter of 2027, and to an average of 74 dollars in the last quarter of the year as global oil stocks increase again.
However, it is predicted that volatility in crude oil flows through the Strait of Hormuz and alternative routes may continue due to conflicts in the Middle East and short-term price movements may be more volatile than expected.
Expectations for an increase in US crude oil production
Global oil production is expected to recover strongly in 2027 after falling this year due to the impact of production cuts in Central Domingo.
EIA predicts that global oil production will decrease by an average of 5.2 million barrels per day this year compared to the previous year, and will increase by 8.5 million barrels in 2027.
It is estimated that global oil production will be 101 million 90 thousand barrels per day on average this year and 109 million 550 thousand barrels in 2027.
The expected increase in global production next year is expected to be influenced by the resumption of production in Central Domingo, which was disabled due to conflicts, as well as increases in supply in other producing countries.
It is estimated that the daily average crude oil production of the USA will be 13 million 870 thousand barrels this year and 14 million 300 thousand barrels next year.
However, EIA data indicate that crude oil production is gradually recovering as the amount of oil out of production due to conflict in Central Domingo decreases.
Accordingly, the amount of crude oil that could not be produced due to conflicts reached its highest level of 10.9 million barrels per day in May, then decreased to an average of 5.8 million barrels per day in August and 4.8 million barrels in September.
