Barclays lowered its Brent oil price forecast by $4 per barrel to $66/bbl for 2025 and by $2 to $60/bbl for 2026, citing the decision by OPEC+ to accelerate oil production hikes.
“Tariff-related developments have certainly been a drag but the OPEC+ pivot has also been a significant driver of the move lower in oil prices of late,” Barclays said in a noted dated Sunday.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to accelerate oil production hikes for a second consecutive month, raising output in June by 411,000 barrels per day, the group said on Saturday.
OPEC+ sources have said Saudi Arabia is pushing the group to accelerate the unwinding of earlier output cuts to punish fellow members Iraq and Kazakhstan for poor compliance with their production quotas.
Barclays noted that the OPEC+ decision is more related to strength in underlying fundamentals and external influence than concerns about member overproduction.
Brent crude futures fell more than $2 a barrel in early trade on Monday, and traded at $59.20 as of 0250 GMT.
Barclays now expects OPEC+ to phase out the additional voluntary adjustments by October 2025, but also expects slightly slower U.S. oil output growth. Overall, this loosens their balance estimates by 290 thousand barrels per day (kbd) for 2025 and 110 kbd for 2026, it said.
Barclays also revised its baseline view on OPEC+, expecting the group to continue its accelerated path of phasing out additional voluntary adjustments, and now sees it taking effect in six months from the initial plan of 18.
“That would result in 390 kb/d and 230 kb/d increases in our 2025 and 2026 OPEC crude forecasts, respectively,” Barclays said.
Barclays now forecasts a decline in U.S. crude output by 100 kbd from the fourth quarter of 2024 to the fourth quarter of 2025, and by 150 kbd in 2026.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Varun H K)