By Anthony Harrup

The U.S. Energy Information Administration raised its 2025 crude oil price estimates following the recent flare-up of conflict in the Middle East, but still sees prices eventually falling as supply growth outpaces demand and global inventories increase.

In its Short Term Energy Outlook, the EIA said Tuesday that it expects international benchmark Brent crude to average $69 a barrel this year, up from $66 in the June outlook, which was released before the conflict over Iran's nuclear program escalated. The agency said significant uncertainty remains around the possibility of renewed tensions despite the cease-fire.

"The increase in the forecast is driven largely by higher near-term prices due to a more significant geopolitical risk premium from the conflict," the EIA said. "Despite the risk premium, we expect significant global oil inventory builds will put consistent downward pressure on oil prices."

The agency cut its 2026 Brent price estimate to $58 a barrel from $59 previously. The EIA sees West Texas Intermediate crude, the U.S. benchmark, averaging $65 a barrel this year and $55 in 2026, compared with $62 and $56, respectively, in its previous forecast.

The EIA raised its forecast for global oil production growth this year to 1.8 million barrels a day from 1.6 million barrels a day, and for 2026 to 1.1 million barrels a day from 800,000 barrels a day in the previous outlook. Its oil demand growth estimates were unchanged at 800,000 barrels a day in 2025 and 1.1 million barrels a day in 2026.

The EIA lowered its 2025 forecast for U.S. natural-gas prices at Henry Hub to $3.70 per million British thermal units from $4 previously, citing higher production and lower expected electricity-sector use, as well as the strong inventory buildup during the spring.

It predicts the natural-gas injection season will end Oct. 31 with 3.91 trillion cubic feet in storage, 5% more than in the June forecast and 3% above the five-year average. For 2026, it estimates an average Henry Hub price of $4.40/mmBtu, down from $4.90 previously.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

July 08, 2025 13:27 ET (17:27 GMT)

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