EIA: Higher Output, Economic Uncertainty Drive Oil Volatility

Washington: Perceptions of oversupply among oil market participants from increasing OPEC+ output and uncertainty about the economic impact of tariffs have raised short-term oil price volatility, the US Energy Information Administration said. According to Qatar News Agency, the EIA expects OPEC+ to keep production below the group's current target path. It forecast supply from the group to increase by about 200,000 barrels per day this year to 42.9 million bpd, up from 42.8 million bpd in the EIA's prior forecast. The EIA now expects US oil output to set a smaller record this year at 13.42 million bpd, down from its prior forecast of 13.51 million bpd. "The effect that new or additional tariffs will have on global economic activity and associated oil demand is still highly uncertain and could weigh heavily on oil prices going forward," the EIA said in its short-term energy outlook report. Output next year will rise to 13.49 million bpd, the EIA said, down from its prior forecast of 13.56 million bpd. US West Texas Intermediate crude oil prices will average 61.81 a barrel this year, the EIA said, a more than 2 per barrel reduction to its prior forecast. The agency lowered its 2025 Brent crude price forecast to 65.85 a barrel, from 67.87 a barrel.