%Oil prices could fall below $50 U.S. per barrel this year, according to a new outlook published by S&P Global Commodity Insights.
Oil prices, which are currently hovering around $65 U.S. a barrel, could fall in coming months as a flood of new supply from the OPEC+ cartel comes onto the market, states the report.
The projection comes with West Texas Intermediate (WTI) crude oil, the U.S. benchmark, at $64.83 U.S. per barrel, and Brent crude oil, the global standard, at $66.76 U.S.
Oil prices have been on a bull run lately as global fuel demand remains strong.
However, S&P Global Commodity Insights doesn’t expect the momentum to last as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) adds more production
Global oil production is expected to rise by 2.2 million barrels per day in the second half of this year, compared to just 390,000 barrels of oil demand growth.
In fact, demand growth in 2025 is expected to be at its lowest level since 2001, excluding the Covid-19 pandemic and global financial crisis, says S&P Global.
As such, crude oil prices, both WTI and Brent, could drop into the $40 U.S. per barrel range later this year.
Lower crude prices will likely cause U.S. drillers such as %Chevron (NYSE: $CVX), Occidental Petroleum (OXY), and ExxonMobil (XOM) to slow production and start taking oil rigs out of commission, says S&P Global Commodity Insights.
By the end of 2026, U.S. oil production could be down 640,000 barrels per day from what it was in mid-2025, according to the new forecast, marking the first decline in a decade.
The stock of Chevron, one of the biggest U.S. oil majors, is down 4% this year and currently trading at $140.21 U.S. per share.
