Will oil prices drop if production rises?

Global crude oil production may increase further this year. The U.S. Energy Information Administration (EIA) has stated that in 2025, total production including refined oil could average 106 million barrels per day, which is one million barrels more than the previous forecast. At the same time, global consumption may reach 104 million barrels per day. Source: Reuters.

The EIA said that because supply exceeds demand, oil inventories will continue to grow until 2026. By the last quarter of this year (October–December), inventories may reach 29.3 billion barrels and by the end of 2026, they could reach 31.8 billion barrels.

Due to increased supply, the average price of Brent crude on the international market could be $68.76 per barrel this year, down from $80 last year. In the U.S. market, the West Texas Intermediate (WTI) average price could drop to $65.15 per barrel.

Oil production in the United States could reach record levels. This year, daily production in the country could average 13.59 million barrels, and in 2026 it may slightly decrease to 13.58 million barrels.

Khaborwala/TSN