Will oil's price decline continue into 2026?

Crude oil prices have been declining due to expectations of a well-supplied market. The U.S. Energy Information Administration (EIA) has raised its forecast for domestic output, and OPEC has signaled that global oil production may exceed demand in 2026.

Front-month futures prices for West Texas Intermediate (WTI) crude have dropped significantly since January 2025. However, the $60 price level has recently acted as a pivot point, with daily prices fluctuating both below and above it.

FRONT-MONTH WTI CRUDE OIL FUTURES—LAST YEAR

Chart showing front-month West Texas Intermediate crude oil futures over the past year with 50-day and 200-day moving-average trend lines.

Sources: Bespoke Investment Group; data through Nov. 14, 2025.

While short-term gains may occur, analysts predict prices will continue to face downward pressure through 2026 because of rising global inventories, although the degree of the drop is debated.

Factors influencing the 2025 price decrease

Increased supply expectations: OPEC has revised its outlook to suggest that global oil supplies may exceed demand in 2026, reversing a previous forecast for a deficit.
Rising U.S. production and inventories: The EIA has increased its projection for U.S. domestic oil output next year. U.S. crude inventories have been increasing, which historically puts downward pressure on prices.
Price forecasts: The EIA has slightly increased its forecast for the average Brent crude price in 2026 to $55 per barrel, but it still expects prices to fall in the first quarter of 2026 to an average of $54 per barrel.
OPEC+ output increases: The group’s production levels impact supply and can reduce upward price pressure.

The International Energy Agency’s (IEA’s) November Oil Market Report noted:

“The relentless upturn in global oil supply paused in October at 108.2 mb/d [million barrels per day]. … Global oil supply was nevertheless up by a massive 6.2 mb/d since January, with gains divided evenly between non-OPEC+ and OPEC+. World oil supply is set to rise by 3.1 mb/d in 2025 and 2.5 mb/d in 2026 on average to reach 108.7 mb/d. Non-OPEC+ accounts for 1.7 mb/d and 1.2 mb/d of the growth, respectively.”
Potential for volatility: While the general trend points to lower prices, the market remains subject to ongoing geopolitical events (including developments in Venezuela, the Middle East, and the Russia–Ukraine conflict); changes in demand driven by stronger-than-expected global growth in the U.S., China, India, and Europe; and the possibility of OPEC+ choosing deeper or longer-lasting cuts than currently signaled.

A dissenting point of view for the 2026 oil price outlook

Loomis Sayles offered a different perspective in a Nov. 10, 2025, analysis:

“For anyone watching the energy markets, oil’s journey in 2025 has been anything but dull. After holding steady above $60 a barrel for much of the year, West Texas Intermediate (WTI) oil recently broke below that psychological threshold. While WTI is back above $60 on the back of new Russian sanctions, the recent drop renewed debate among analysts, investors, and everyday consumers about what comes next. … We anticipate volatility and weakness in the oil market over the near term, especially in light of current geopolitical risks. However, we expect oil prices to begin a slow recovery in the second half of 2026.”

The firm argues that OPEC+’s decision to lift voluntary production cuts, softening demand for OPEC+ barrels, and a contango futures curve all point to oversupply and lower prices into 2026, potentially even into the $40s if the IEA’s surplus projections materialize.

However, the authors note that inventories in the U.S. and Organisation for Economic Co-operation and Development haven’t built as expected, much of the extra supply is sitting in China’s reserves, U.S. shale growth is slowing, effective OPEC spare capacity is likely much lower than advertised, and a large share of “surplus” oil is simply stuck in transit due to sanctions and logistics. Combined with very bearish market positioning and persistent geopolitical risk, they see the strong possibility for a gradual recovery in oil prices later in 2026 rather than a prolonged slump.

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Where will oil prices be by 2030?

Forecasting future oil market pricing is challenging, but EBC Financial Group summarizes several perspectives:

“Looking toward 2030, most analysts expect Brent to stabilise in the $60-$73 range, though forecasts vary widely depending on the pace of energy transition, OPEC+ production discipline, and demand from emerging markets. The bearish case sees prices falling toward $50 if renewable adoption accelerates, while bullish scenarios suggest potential spikes above $100 if geopolitical tensions escalate or climate policies stall. …

“Most forecasts suggest oil prices will remain relatively stable, with moderate upward or downward movement depending on supply and demand dynamics:

“EIA: Expects Brent crude to average $73 per barrel in 2030.

“International Energy Agency (IEA): Suggests prices could stabilise between $75 and $80 per barrel by 2030, influenced by new investments in fossil fuels and the ongoing shift to clean energy. [2]

“World Bank: Projects Brent at $73 per barrel in 2030, with some scenarios suggesting a possible dip as low as $60 per barrel if global fuel demand falls sharply due to climate policies.

“LongForecast: Offers a more bullish scenario, with Brent potentially trading above $100 by 2030, though this is considered less likely by most mainstream analysts.”

EBC points out several key factors traders and investors should watch closely: