Oil Price Forecast Looks Grim For U.S. Producers
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SIGNAL HILL, CA – MARCH 5: Pumps draw petroleum from oil wells through the night as the cost of crude oil tops $104 per barrel in its surge to new record high prices March 5, 2008 in Signal Hill, California. The cost of crude has California drivers paying more than ever. Statewide gas prices are now 58 cents a gallon higher than the same time last year. (Photo by David McNew/Getty Images) Getty Images The U.S. Energy Information Administration released its short-term energy outlook this week, predicting that oil prices will continue to slide into next year. Brent crude, which averaged $71 per barrel in July, is forecast to drop to $58 per barrel for the 4th quarter of 2025 and is expected to slide further to $50 per barrel in early 2026. Brent crude is the global benchmark sourced from the North Sea and typically trades at a premium to West Texas Intermediate, the U.S. benchmark from Texas. If this forecast holds up, it will put WTI in the $47 per barrel range in 2026, far below break-even prices. The average break-even price for large oil producers in the U.S. is $61, according to the Federal Reserve Bank of Dallas. Smaller producers come in with a break-even of $66. There is variability between firms; some can drill wells profitably with oil at $45. Oil producers have told us what they would do if these prices occurred in a recent energy survey put out by the Dallas Fed. Every quarter, a survey is sent out to exploration and production firms across the country. The survey captures data on drilling activity, capital spending, and supply chain conditions, as well as comment sections where oil and gas executives can share their thoughts on what they think needs to happen moving forward. The…
Filed under: News - @ August 16, 2025 10:27 am