BofA: continues to see long-dated Brent crude oil prices holding up in a $60-$80/bbl range and even projects a price recovery into 2H26

BofA: continues to see long-dated Brent crude oil prices holding up in a $60-$80/bbl range and even projects a price recovery into 2H26

Title: EIA Forecasts Brent Crude Oil Prices to Fall Below $60 in Q4 2025

The U.S. Energy Information Administration (EIA) has released its August Short-Term Energy Outlook (STEO), predicting a significant decline in Brent crude oil prices. The agency expects Brent crude to average less than $60 per barrel in the fourth quarter of 2025, marking the first quarter since 2020 with average prices at this level. This forecast is driven by a substantial increase in global oil supply, which is outpacing demand for petroleum products.

According to the EIA, Brent crude is projected to average near $50 per barrel through 2026. The global benchmark settled at just above $66 on Tuesday, August 12. The EIA's Acting Administrator, Steve Nalley, stated that "there’s a lot of uncertainty in the petroleum market. In the past, we have seen significant drops in oil prices when inventories grow as quickly as we are expecting in the coming months" [1].

The EIA forecasts that U.S. crude production will hit a record 13.41 million barrels per day in 2025 due to increases in well productivity. However, lower oil prices are expected to prompt a fall in output in 2026. Lower oil prices will also lead to lower U.S. retail prices for gasoline and diesel, and will pull domestic oil production down from the record highs in 2025 [1].

The EIA's outlook also predicts a significant drop in global oil prices, with Brent crude falling from $71 to around $50 per barrel by early 2026. Global oil inventories are expected to grow more than 2 million b/d in late 2025, leading to lower crude prices. OPEC+ and non-OPEC producers are likely to cut production in response to falling prices, moderating inventory growth [2].

US gasoline prices are forecasted to decrease by about 6% in 2026, averaging less than $2.90/gal. US distillate inventories are projected to hit lowest levels since 2000, driven by higher exports and demand. Natural gas prices are set to increase due to stable production and rising LNG exports, reaching over $4.30/MMbtu in 2026 [2].

In contrast, Bank of America (BoA) continues to see long-dated Brent crude oil prices holding up in a $60-$80/bbl range and even projects a price recovery into the second half of 2026. This outlook reflects BoA's expectation of a potential supply-demand imbalance and a potential recovery in oil prices later in the year [3].

References:
[1] https://www.reuters.com/business/energy/eia-sees-brent-oil-prices-falling-less-than-60bbl-q4-2025-08-12/
[2] https://www.ogj.com/general-interest/economics-markets/news/55309493/eia-forecasts-steep-drop-in-brent-crude-oil-prices-in-coming-months
[3] https://www.eia.gov/outlooks/steo/