Oil Prices Poised for Potential decline as Production Increases, Demand Remains Modest
Global oil prices are facing downward pressure in teh coming months due to anticipated increases in production from OPEC Plus nations adn a projected accumulation of oil stocks, according to recent reports and industry analysis. The Energy Information Management forecasts oil stocks will rise by 2.1 million barrels per day in the second half of 2025, remaining elevated into the following year.
This outlook arrives amid concerns of a potential oil surplus, impacting producers, consumers, and the broader global economy. A modest increase in demand coupled with rising supply could significantly alter market dynamics, possibly leading to lower energy costs but also impacting oil-dependent economies. Goldman sachs anticipates a larger oil surplus in 2026, driven by increased supplies from the Americas offsetting potential losses in Russian supply and moderate global demand growth.
OPEC Plus recently agreed to increase production by 137,000 barrels per day starting in October – a considerably smaller increase than the 555,000 barrels per day added in September and August, and 411,000 in July and June.emma Mazhari, CEO of Merck Oil Trading at the APEC conference, stated, “I think there is a high possibility that prices will turn to the total global balances.”
Goldman Sachs maintains its 2025 price expectations but forecasts an average price of $52 to $56 per barrel in 2026 for Brent/West Texas Intermediate. Despite these forecasts, oil prices saw a temporary increase today, rising over 1% following an Israeli military operation targeting leaders of Hamas in Doha, Qatar. Futures reached $66.76 a barrel before slightly decreasing, while US West Texas Intermediate crude futures rose 0.59% to $62.63 per barrel.
