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Barclays lowers Brent crude forecasts for 2025 and 2026 as OPEC+ increases output.

Barclays lowered their Brent oil forecast by $2 per barrel for 2026 and $4 for 2025, citing OPEC+'s decision to increase oil production.

Barclays stated in a note dated Sunday that "Tariff related developments have been a drag, but the OPEC+'s pivot has also played a major role in the recent decline in oil prices."

OPEC+ - which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, such as Russia - agreed on Saturday to increase oil production for a second month in a row, increasing output by 411,000 barrels / day in June.

OPEC+ sources claim that Saudi Arabia wants to speed up the unwinding process of the earlier production cuts in order to punish Iraq and Kazakhstan, who have not met their production quotas.

Barclays stated that the OPEC+ decisions are more related to fundamental strength and external influence rather than concerns over member overproduction.

Brent crude futures dropped more than $2 per barrel during early trading on Monday and were at $59.20 by 0250 GMT.

Barclays expects OPEC+ will phase out additional voluntary adjustments in October 2025. They also expect a slightly slower growth of U.S. crude oil production. It said that this would loosen their estimates of balance by 290 thousand barrels a day (kbd), and 110 kbd, for 2025.

Barclays has also revised its baseline on OPEC+. It expects the group to continue their accelerated path in phasing-out additional voluntary adjustments.

Barclays stated that this would lead to an increase of 390 kb/d in 2025, and 230 kb/d in 2026 in their OPEC crude predictions.

Barclays forecasts that the U.S. crude oil production will decline by 100 kbd between the fourth quarters of 2024 and 2025. This will then increase to 150 kbd by 2026. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Varun H K)

(source: Reuters)