� EIA SHORT-TERM ENERGY OUTLOOK
EIA expects the price of crude oil to fall to below $ 60 per barrel by the end of the year and average near $ 50 per barrel through 2026.
The U. S. Energy Information Administration( EIA) expects a significant decline in the price of oil as growth in the global supply of oil vastly surpasses growth in demand for petroleum products. In its August Short-Term Energy Outlook( STEO), EIA expects the Brent crude oil spot price to average less than $ 60 per barrel in the fourth quarter of 2025— the first quarter with average prices that low since 2020.
OPEC + announced in early August week that it will unwind its oil production cuts by September 2025, which is a year ahead of its previous schedule. For the first time since EIA began publishing an OPEC + production forecast in 2023, EIA expects most global oil production growth to come from OPEC + countries. EIA forecasts the supply growth will outpace demand, leading to quickly growing inventories.
“ There’ s a lot of uncertainty in the petroleum market. In the past, we have seen significant drops in oil price when inventories grow as quickly as we are expecting in the coming months,” said EIA Acting Administrator Steve Nalley. EIA expects lower oil prices to lead to lower U. S. retail prices for gasoline and diesel and to pull domestic oil production down from the record highs in 2025.
Short-Term Energy Outlook
• Global oil prices. The Brent crude oil price in our forecast declines significantly in the coming months, falling from $ 71 per barrel( b) in July to $ 58 / b on average in the fourth quarter of 2025( 4Q25) and around $ 50 / b in early 2026. The price forecast is driven largely by more oil inventory builds following OPEC + members’ decision to accelerate the pace of production increases. We now expect global oil inventory builds will average more than 2 million barrels per day( b / d) in 4Q25 and 1Q26, which is 0.8 million b / d more than in last month’ s STEO. Low oil prices in early 2026 will lead to a reduction in supply by both OPEC + and some non-OPEC producers, which we expect will help moderate inventory builds later in 2026. We forecast the Brent crude oil price will average $ 51 / b next year, down from our forecast of $ 58 / b in last month’ s STEO.
• U. S. crude oil production. We expect increases in well productivity will push U. S. crude oil production to an all-time high near 13.6 million b / d in December 2025. However, as crude oil prices fall, we expect U. S. producers will accelerate the decreases in drilling and well completion activity that have been ongoing through most of this year, and we forecast U. S. crude oil production will decline to 13.1 million b / d by 4Q26. On an annual basis, we now forecast crude oil production will average 13.4 million b / d in 2025 and 13.3 million b / d in 2026.
• U. S. gasoline prices. Lower crude oil prices push down retail prices for petroleum products in our forecast. We expect the price for retail gasoline across the U. S. will average less than $ 2.90 per gallon( gal) next year, about 20 cents / gal( 6 %) less than this year.
• U. S. distillate inventories. U. S. total distillate fuel inventories in our forecast end 2025 at the lowest end-of-year level since 2000, after decreasing 14 % over the course of the year primarily due to increased U. S distillate exports and increased demand for petroleum-based distillate. We expect lower domestic distillate production because of decreased U. S. refinery capacity and continued strong export demand to keep inventory levels low throughout the forecast period, with distillate inventories remaining relatively flat in 2026. Ongoing low inventories will keep distillate fuel refining margins high during the forecast period.
• Natural gas prices. We expect the Henry Hub natural gas spot price will rise from an average of $ 3.20 per million British thermal units( MMBtu) in July to $ 3.90 / MMBtu in 4Q25 and $ 4.30 / MMBtu next year. Rising natural gas prices reflect relatively flat natural gas production amid an increase in U. S. liquefied natural gas exports.
• Electricity consumption. Electricity demand growth in our forecast is driven by the commercial and industrial sectors. We expect electricity sales to the commercial sector to rise by 3.0 % in 2025 and 4.5 % in 2026, driven largely by more demand from data centers, while electricity sales to industrial consumers rise by 2.0 % in 2025 and 3.5 % in 2026.
• Coal exports. We forecast a 10 % decline in coal exports in 2025, reflecting a global market characterized by persistent oversupply and lower coal prices for both steam and metallurgical coal. Steam coal exports in our forecast fall 7 % this year to 47 million short tons( MMst) and decline 5 % in 2026 to below 45 MMst. Metallurgical coal
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