Forecasts in Focus
The best way to get oil price forecasts less wrong
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No commodity is more important for the world economy than crude oil. It, along with coal and natural gas, powers our electricity grids and transport networks, greasing the gears and cogs of our modern life. And when their price shifts, as many readers will painfully remember from the 2021–2023 global energy crisis, the effects on our personal finances and the world economy are considerable.
Forecasting what will happen to the price of crude oil and other energy commodities has never been more challenging. The world is destabilizing, with huge implications for oil, gas and coal prices. The U.S.—which, just over 20 years ago, welcomed China into the World Trade Organization—shifts its trade policy erratically, and sometimes via the social media account of its President. Moreover, the nation’s withdrawal from its role as the world’s “policeman” has contributed to the number of conflicts to double globally since 2020, according to the think-tank ACLED, threatening disruption to oil production and shipping.
In this fast-moving world, quarterly or even monthly updates to commodity forecasts go out of date quicker than before. Recognizing this, at FocusEconomics, we have expanded our offer to include daily updates of our forecasts via our data platform, harnessing the latest projections from our panel of expert analysts into one number—our Consensus Forecast. Nobody has a crystal ball, but, equally, nobody—businesses, consumers and investors—can afford to wait to see what happens in the future before making investment or spending decisions that need to be made today. Daily Consensus forecasts are the most accurate picture of what the market thinks will happen ahead at any given time.
Oil market
In the past few months, economists have become more bearish about crude oil prices: In 2025, the price of Brent crude oil is projected by our Consensus to decline 14%, and then by a further 1% in 2026, falling to their lowest level since the pandemic in 2020.
Two big developments have led to this greater bearishness. After U.S. President Trump announced his tariff plan in April, the International Energy Agency (IEA) slashed its 2025 outlook for worldwide growth of oil demand by 30%. And then, that same month, OPEC+ began what has ended up being so far a six-long set of pledges to accelerate output hikes, leading the IEA to hike its projection for worldwide growth of oil supply by a whopping 75%.
Our panelists were quick to respond to these developments, as explained by economists at ING in early May:
“OPEC+ is implementing another aggressive supply hike […]. This increase solidifies a shift in policy. With prospects of further large supply increases in the months ahead, we revised our oil forecasts lower.”
Natural gas market
In the natural gas market, things have been different. In recent months, our panelists have become more upbeat about the price outlook for the fuel. Our Consensus projects the main U.S. natural gas benchmark, Henry Hub, to trade 51% higher this year than last, and rise a further 8% in 2026.
Analysts at the EIU commented:
“The heavy draw on stocks during the 2024-25 winter will contribute to the increase in Henry Hub prices in 2025. Rising demand from LNG exporters and increased production costs arising from Mr Trump’s tariffs will also drive up prices.”
In contrast to oil, in the natural gas market, the political shock of Trump has made investors more optimistic about prices ahead: He’s rushed to approve licenses to export liquified natural gas, the shipments of which hit 9.1 million tonnes in July—over 1,000% higher than at the start of his first term in November 2016. Meanwhile, a relatively cold U.S. winter drained inventories of natural gas to far below seasonal averages. In this case, our panelists also reacted speedily:
Coal market
The coal market, already the black sheep among the energy commodity complex as it is the most polluting, has seen the sharpest downgrade in price forecasts since the start of the year. The prices of both Australian coking and thermal coal—the former used for smelting, the latter for electricity generation—are seen falling roughly 20% in 2025 year on year.
Samantha Dart and Hongcen Wei, analysts at Goldman Sachs, explain:
“We believe global coal balances remain soft and particularly, softer than our previous expectations, given weaker-than-expected coal consumption in H1 2025, attributed to a warmer-than-expected Q1 in Northeast Asia followed by a cooler-than-expected Q2 in South Asia. We accordingly nudge lower our Aug-Sep/Q4 [benchmark Australian thermal coal] price forecasts by 3.0/5.0 USD per metric ton to 117/113 USD per metric ton.”
Moreover, Trump’s tariffs have hit especially hard North-east Asian economies, like China, Japan, South Korea and Taiwan. These nations depend on exports to fuel growth and are the main consumers of Australia’s coal. Prices have also been dampened by a supply glut in China, plus bad weather impeding exports from Australia. Take a look at how our panelists have reacted to these developments below:
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In our latest special PDF report, we examine our Consensus Forecasts for the U.S. fiscal balance and public debt in light of a recent raft of policy changes by the Trump administration. Below are some key takeaways from that report.