By Anthony Harrup

The U.S. Energy Information Administration predicts a sharp drop in benchmark crude oil prices in the fourth quarter as the Organization of the Petroleum Exporting Countries and its allies accelerate the unwinding of output cuts, leading to larger global inventory builds.

In its Short Term Energy Outlook, the EIA said Tuesday that it expects Brent crude to average $58 a barrel in the fourth quarter of this year, and fall to around $50 a barrel in early 2026. The agency previously forecast Brent at $64 a barrel in the fourth quarter.

"The price forecast is driven largely by more oil inventory builds following OPEC+ members' decision to accelerate the pace of production increases," the EIA said. It predicts global inventory builds of more than 2 million barrels a day in the fourth quarter of 2025 and first quarter of 2026, or 800,000 barrels a day more than previous expected.

For U.S. benchmark WTI crude, the EIA lowered its fourth-quarter price estimate to $54 from $60 a barrel. For all of 2026, it projects an average Brent price of $51 a barrel and WTI at $48 a barrel.

The drop in prices in early 2026 is expected to result in a reduction in supply from both OPEC+ and some non-OPEC producers, moderating inventory builds in the latter part of the year, according to the EIA. Lower prices also are likely to cause a small increase in demand.

In the U.S., the agency sees record oil production near 13.6 million barrels a day in December 2025 thanks to increased well productivity, followed by a drop to 13.1 million barrels a day in the fourth quarter of 2026 as next year's low prices prompt producers to cut back on drilling at an even faster pace.

The EIA predicts average U.S. production of 13.4 million barrels a day this year and 13.3 million barrels a day in all of 2026.

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

(END) Dow Jones Newswires

August 12, 2025 13:07 ET (17:07 GMT)

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