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Investing.com -- Barclays (LON:BARC) has revised its Brent oil price forecast, reducing it by $4 per barrel to $66/bbl for 2025, and by $2 to $60/bbl for 2026. The bank attributed this adjustment to the decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to increase oil production.
The bank stated that the recent drop in oil prices was influenced by both tariff-related developments and the OPEC+ decision to boost production. OPEC+, a group that includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has agreed to raise oil production for the second consecutive month. In June, the group increased output by 411,000 barrels per day.
According to media reports, Saudi Arabia is pushing for faster unwinding of previous output cuts, in response to Iraq and Kazakhstan’s failure to comply with their production quotas.
Barclays, however, noted that the OPEC+ decision is more tied to strength in underlying fundamentals and external influences than concerns about overproduction by its members.
Brent crude futures experienced a drop of more than $2 a barrel in early trading on Monday, with prices standing at $59.20 as of 0250 GMT.
Barclays anticipates that OPEC+ will phase out additional voluntary adjustments by October 2025. The bank also predicts a slightly slower growth in U.S. oil output. These factors have led to a loosening of their balance estimates by 290 thousand barrels per day (kbd) for 2025 and 110 kbd for 2026.
The bank also adjusted its baseline view on OPEC+, expecting the group to continue its accelerated path of phasing out additional voluntary adjustments. The bank now predicts this will take effect in six months, rather than the initial plan of 18 months. This adjustment would result in increases of 390 kb/d and 230 kb/d in Barclays’ 2025 and 2026 OPEC crude forecasts, respectively.
Finally, Barclays forecasts a decrease in U.S. crude output by 100 kbd from the fourth quarter of 2024 to the fourth quarter of 2025, and by 150 kbd in 2026.
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