U.S. oil production is expected to set a larger record this year than previously forecast, even as global oil supply outpaces fuel demand, the Energy Information Administration said in its Short-Term Energy Outlook report on Wednesday.
The Department of Energy’s statistical arm expects U.S. oil output to average 13.6 million barrels per day both this year and in 2026, up from its prior forecast of 13.5 million bpd in both years. The agency said the revision was due to higher than expected output in August.
Oil output averaged 13.2 bpd last year, which was the prior record.
Global oil inventories will rise through 2026 as global oil production is growing faster than demand for petroleum fuels, the EIA said, expecting it to pressure crude oil prices.
Oil prices will fall through the end of 2025 and to average $55 per barrel in 2026, the EIA said.
GASOLINE, DIESEL PRICES TO FALL
Petroleum fuel prices will fall as the price of oil comes down.
U.S. gasoline prices is expected to fall to an average of $3 per gallon in next year, down 10% from 2024, and diesel prices will drop to $3.5 per gallon in 2026, down 7% from 2024, the EIA said.
The price of crude oil accounts for roughly half the price of gasoline and diesel. The EIA forecasts the price of crude oil to account for a 43% share of the price of gasoline and 36% of the price of diesel in 2026.
(Reporting by Nicole Jao and Shariq Khan in New York; Editing by David Gregorio)