� EIA SHORT-TERM ENERGY OUTLOOK
Forecast overview Global oil inventories . We expect OPEC + production cuts will reduce global oil inventories and keep crude oil prices near current levels through the first quarter of 2025 . Gradual increases in production combined with relatively weak global oil demand growth will increase global oil inventories in the second half of 2025 through 2026 , placing downward pressure on prices through the remainder of our forecast . As a result , we forecast that the Brent crude oil price will average $ 74 per barrel ( b ) in 2025 before falling to $ 66 / b in 2026 .
Global oil production . We forecast global production of liquid fuels will increase by 1.9 million barrels per day ( b / d ) in 2025 and 1.6 million b / d in 2026 because of a combination of supply growth from countries outside of OPEC + and the relaxation of OPEC + production cuts . We do not anticipate that the sanctions on Russia ’ s oil and shipping sectors announced on January 10 will significantly affect our oil production forecast .
U . S . petroleum products consumption . We expect U . S . distillate fuel oil consumption to increase by 4 % in 2025 and remain flat in 2026 driven by GDP growth and increased industrial activity . We expect U . S . motor gasoline consumption to remain flat in 2025 as fuel efficiency gains outpace increases in driving . In 2026 , we expect continued efficiency gains and slower employment growth will reduce gasoline consumption slightly .
Natural gas prices . The Henry Hub spot price averaged $ 4.13 per million British thermal units ( MMBtu ) in January and reached a daily high of $ 9.86 / MMBtu on January 17 ahead of a cold snap that spread across the United States , leading to above-average inventory withdrawals . We expect the spot price to rise through 2026 , averaging almost $ 3.80 / MMBtu in 2025 , up 65 cents from our January 2025 Short-Term Energy Outlook , and reach nearly $ 4.20 / MMBtu in 2026 .
Electricity generation . We expect generation in the U . S . electric power sector to increase by 2 % in 2025 and by 1 % in 2026 , after growing 3 % last year , led by growth in renewable energy sources . If electricity generation grows in each of the next two years , it would mark the first three years of consecutive growth since 2005 – 07 . The share of U . S . generation from solar grows from 5 % in 2024 to 8 % in 2026 because of an expected 45 % increase in the amount of solar generating capacity between 2024 and 2026 . Conversely , we expect the share of U . S . generation from natural gas to fall from 43 % in 2024 to 39 % in 2026 as natural gas prices rise . Our forecasts for increases in solar and wind generation are based on the planned generator projects reported to us in our Preliminary Monthly Electric Generator Inventory .
Macroeconomic assumptions : The macroeconomic assumptions in this month ’ s forecast were finalized prior to the Executive Order on February 1 , 2025 , that imposed a suite of tariffs on Canada , Mexico , and China and the subsequent pause on February 3 for U . S . tariffs on Canada and Mexico . The macroeconomic model we use in the STEO is based on S & P Global ’ s macroeconomic model , which this month assumed a 10 % universal tariff and a 30 % tariff on imports from China and does not reflect current policy . We will continue to monitor and will update our outlooks as policies change . Release Date : Feb . 11 , 2025
� RESIDENTIAL ENERGY EXPENDITURES
Residential energy expenditures for homes heating with natural gas and propane for the current winter ( November through March ) have grown , and now we expect them to total 10 % more than last winter . In our initial Winter Fuels Outlook forecasts published in October 2024 , we had expected that homes mainly heating with natural gas would spend between 2 % less or 7 % more this winter than last , depending on weather conditions . As the winter has progressed and energy prices and consumption have increased beyond our initial expectations , we have revised these forecasts upward .
Each October , we publish a Winter Fuels Outlook with forecasts for energy consumption , prices , and expenditures for U . S . households . We categorize homes based on their main heating fuel : natural gas , electricity , propane , or heating oil . Almost all U . S . homes ( 96 % in 2023 ) use one of those four fuels as their main heating source .
In each month from November through March , we update these forecasts based on actual weather and prices and the most recent Short-Term Energy Outlook forecasts for future weather
10 MARCH 2025 | FUEL OIL NEWS | www . fueloilnews . com