New EIA report raises oil demand and supply forecasts

The U.S. Energy Information Administration (EIA) has updated its short-term outlook for crude markets, projecting higher oil prices for the coming months and adjusting both supply and demand expectations through 2027.

According to the agency’s latest Short-Term Energy Outlook (STEO), the benchmark West Texas Intermediate (WTI) crude price is expected to average $84.56 per barrel during the second quarter, covering the period between April and June. 

This represents a significant upward revision compared with the forecast published in February.

Oil prices moved sharply during early March, rising from about $65 per barrel in late February to nearly $120 per barrel on March 9, before falling back to the low-$80 range days later. 

Despite the volatility, the EIA expects prices to stabilize near the mid-$80 range during the second quarter.

For the longer term, the agency now forecasts WTI to average $73.61 per barrel in 2026, a notable increase from the $53.42 per barrel estimate presented in the previous monthly outlook.

Brent crude outlook

The EIA also revised its forecast for Brent crude, the international oil benchmark.

Brent prices are expected to average $90.56 per barrel in the second quarter, before gradually easing toward $70 per barrel by the end of the year. 

Overall, Brent crude is projected to average $78.84 per barrel for the year.

The agency noted that uncertainty in global supply conditions may keep a risk premium embedded in prices in the near term.

U.S. crude production

Higher price expectations have also led the EIA to adjust its outlook for U.S. crude production.

Domestic output is now projected to average 13.61 million barrels per day (b/d) in 2026, which represents an increase of 100,000 b/d compared with the February forecast.

Looking further ahead, the production outlook for 2027 was revised upward to 13.83 million b/d, an increase of 510,000 b/d compared with the previous estimate.

Global production outlook

On the global side, the EIA revised 2026 world oil production downward to 107.04 million barrels per day, a reduction of 810,000 b/d compared with the previous monthly outlook.

For 2027, however, global supply is expected to rise to 109.61 million barrels per day, an increase of 860,000 b/d, with the United States accounting for more than half of that growth.

Demand forecasts

The agency also raised its projections for oil demand.

In the United States, petroleum and liquid fuels consumption is expected to average 20.6 million barrels per day in 2026 and 20.73 million barrels per day in 2027. 

These figures represent increases of 10,000 b/d and 70,000 b/d, respectively, compared with the February outlook.

Globally, demand is forecast to reach 105.17 million barrels per day in 2026 and 106.61 million barrels per day in 2027, reflecting upward revisions of 380,000 b/d and 540,000 b/d.

Inventory outlook

Despite stronger demand projections, the EIA still expects oil inventories to increase during 2026, though at a slower pace than previously anticipated.

Global crude inventories are now projected to build at a rate of 1.9 million barrels per day, down from the 3.1 million barrels per day accumulation rate forecast in last month’s report.

The updated outlook highlights a market where price expectations, production forecasts, and demand projections continue to shift as new data emerges throughout the year.

New EIA report raises oil demand and supply forecasts