Brent and WTI crude forecasts rise after EIA STEO update

EIA raised Brent crude forecast and WTI crude forecast this year

According to the U.S. Energy Information Administration’s Short-Term Energy Outlook (STEO), the agency raised its average brent crude forecast and WTI crude forecast for this year. The update reflects a stronger near-term balance for crude benchmarks.

The revision acknowledges recent risk premia and supply tightness. Even so, the same outlook continues to anticipate softer averages into 2026 as supply growth increasingly outpaces demand.

Why the EIA Short-Term Energy Outlook (STEO) raised forecasts

The upward adjustment stems from geopolitical uncertainty, including Middle East tensions, and shifting supply–demand balances. Short-term draws and precautionary buying can lift prompt prices and the annual average. Non-OPEC supply resilience and demand variability also influence the near-term path.

The underlying framework remains fundamentals-led: as supply expands faster than demand, prices tend to ease. The near-term uplift is presented as a risk premium rather than a structural trend change.

A leading bank’s commodities desk underscored the dynamic. “Oil surplus was visible in January data and is likely to persist,” said Natasha Kaneva, Head of Global Commodities Strategy, J.P. Morgan Research.

What this means now for prices, gasoline, and inflation

Higher crude averages for this year can translate into modestly firmer gasoline prices, depending on refining margins and seasonal patterns. Headline inflation could reflect some of that pass-through. The magnitude will depend on regional product balances and taxes.

Based on analysis from S&P Global Commodity Insights, significant inventory builds in the latter half of 2025 are a key driver of declining averages into 2026. If inventories accumulate as projected, pump prices and inflation pressures would likely moderate. That scenario remains conditional on supply discipline and realized demand.

Institutional comparisons: EIA vs J.P. Morgan, Goldman, S&P Global

EIA vs. J.P. Morgan Research and Goldman Sachs: 2025–2026 view

In its latest framing, the federal outlook places Brent near $69 per barrel in 2025 and about $58 in 2026. The same U.S. bank cited above estimates roughly $60 for 2026 Brent. Goldman Sachs expects around $56 for Brent and $52 for WTI in 2026.

Alignment with S&P Global Commodity Insights on inventories and oversupply

The commodity analytics provider reports the agency later projected Brent at $51 in 2026 and WTI near $48, linking declines to substantial inventory builds in late-2025. That inventory trajectory implies oversupply into 2026. The alignment suggests continued downward pressure on benchmarks as stocks accumulate.

FAQ about EIA Short-Term Energy Outlook (STEO)

Why did the EIA raise its near-term crude price outlook and what factors are driving the revision?

The STEO cites geopolitics, tighter near-term balances, and inventory paths lifting this year’s average, while fundamentals still point to supply outpacing demand and lower prices into 2026.

How do the EIA’s projections compare with J.P. Morgan and Goldman Sachs for 2025–2026?

Broadly aligned: near-term agency averages are higher, while the banks see 2026 Brent in the mid-$50s to about $60, below those near-term levels.