Bank of America on Thursday said it expected rising production by OPEC and its allied producers would increase the crude oil market surplus.

The bank also forecast that Brent crude prices would drop below $60/bbl in the second half of this year due to sharp global oil inventory increases.

BofA projected the average oil market surplus will rise to 890,000 b/d in the 12 months ending in June 2026. This would result in global inventory builds of around 100 million bbl over the period.

The bank said it maintained its bearish outlook for oil prices in the second half of this year, as it expects Brent to average $63.50/bbl and eventually fall below $60/bbl.

In late July, BofA predicted Brent prices would weaken to $60/bbl in the fourth quarter of the year, as the Brent term structure would likely flip to contango - a condition when future supplies are worth more than current ones and is typically associated with oversupply.

On Aug. 3, OPEC+ agreed to increase oil production by 547,000 b/d in September, which would be the group's fifth consecutive monthly increase in output.

The bank said lower oil prices have already led to a reduced U.S. rig count and should further slow U.S. shale oil production growth by the end of this year.

BofA said, however, Brent oil price could rebound above $70/bbl by the summer of 2026 due to a combination of easier global monetary policy, a weaker dollar, more disciplined OPEC+ production and lower U.S. oil volumes.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Frank Tang, ftang@opisnet.com; Editing by Steve Cronin, scronin@opisnet.com

(END) Dow Jones Newswires

August 14, 2025 12:43 ET (16:43 GMT)

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