The federal Energy Information Administration anticipates lower crude oil prices in coming months. The agency predicts as much as a $19 per-barrel plunge by early 2026. The forecast was issued by the EIA in a short-term prediction.
The agency believes crude oil prices will decline by year’s end, slipping from an August average of $68 per barrel to $59 per barrel. Prices will drop even further by 2026 and, according to the EIA, will hit about $50 a barrel by early next year.
“Global oil prices: We expect the Brent crude oil price will decline significantly in the coming months, falling from $68 per barrel in August to $59/b on average in the fourth quarter of 2025 (4Q25) and around $50/b in early 2026.
The price forecast is driven by large oil inventory builds as OPEC+ members increase production,” according to the EIA forecast.
“We expect global oil inventory builds will average more than 2 million barrels per day (b/d) from 3Q25 through 1Q26. We expect low oil prices in early 2026 will lead to a reduction in supply by both OPEC+ and some non-OPEC producers, moderating inventory builds later in 2026. We forecast the Brent crude oil price will average $51/b next year. We finalized this outlook before OPEC+ announced on Sept. 7 that it plans to raise production by 137,000 b/d in October 2025.”
• Gasoline prices: Falling oil prices will lead to a drop in gasoline prices. EIA expects the U.S. average retail price for regular-grade gasoline will average about $3.10 per gallon this year, down 20 cents/gal from last year. Retail gasoline prices in the forecast fall to an average of $2.90/gal in 2026, with the annual average price falling below $3.00/gal in all regions except the West Coast.
• Gasoline expenditures: Driven by falling gasoline prices, U.S. drivers’ gasoline expenditures as a share of disposable personal income are likely to be the lowest since at least 2005, excluding the pandemic-affected year of 2020. EIA estimates expenditures will average less than 2% of disposable income this year, down from an average of 2.4% during the previous decade.
• U.S. gasoline consumption: EIA anticipates a slight increase in U.S. gasoline consumption next year. The forecast for rising gasoline consumption is driven by an upward revision to the number of people of working age compared with the agency’s previous forecasts, and lower gasoline prices compared with forecasts from earlier this year.
• Natural gas prices: EIA expects the Henry Hub natural gas spot price will rise from an average of $2.91 per million British thermal units (MMBtu) in August to $3.70/ 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.
• Natural gas and crude oil drilling: Due to rising natural gas prices and falling oil prices in 2026, “We forecast that crude oil will trade at its lowest premium to natural gas since 2005,” EIA reported. As a result, the agency expects drilling activity in the U.S. to be more centered in natural gas-intensive producing regions in 2026.
“We expect U.S. natural gas production will be relatively flat next year compared with 2025, while we expect crude oil production will decline by about 1%.”
• Electricity generation has been growing rapidly this year as a result of increasing demand for power from data centers and industrial customers. EIA predicts that total U.S. generation by the electric power sector will grow by 2.3% this year and a further 3.0% next year. EIA expects solar power will supply the largest share of the increase in both years.