EIA Forecasts Global Oil Stock Builds in Fourth Quarter

In its latest Short Term Energy Outlook, the EIA forecast global oil production would exceed consumption in the fourth quarter of 2026. It expects inventories to build by 3.5 million barrels a day in the first half of 2027. Most Middle East production outside Iran is expected to return to pre-conflict levels by the end of next year, while Iranian exports are forecast to remain constrained through the outlook period. The agency said flows through the Strait of Hormuz and alternative routes would remain vulnerable to disruption.

The EIA expects global oil demand to fall by 2 million barrels a day this year, with lower consumption in China and the Middle East. Reduced air travel and weaker economic activity have weighed on demand in the region, the agency said. Demand is forecast to rise by 2 million barrels a day in 2027, helped in part by lower prices.

The agency raised its 2027 price forecasts, putting Brent at $86 a barrel, up from $84, and West Texas Intermediate at $81, up from $80.

U.S. crude inventories stood at 410 million barrels at the end of October, their lowest level for that time of year since 2014, the EIA said. It attributed the decline largely to a wide price spread between Brent and WTI, which encouraged U.S. exports and curtailed imports. High crude inputs at U.S. refineries in recent months also helped draw down stocks, the agency said.