EIA Short-Term Energy Outlook

Outlook Energy

Source: EIA
Source Link: https://www.eia.gov/
Frequency: Monthly
Next Release(s): October 7th, 2025 10:00 AM

Latest Updates

U.S. GDP growth was revised higher in the September 2025 STEO, with forecasts now at +1.7% for 2025 (+0.3 ppts vs prior) and +2.4% for 2026 (+0.4 ppts vs prior), supported by energy-related adjustments to prices, consumption, and electricity demand.
- Oil prices: Brent crude is forecast to fall from $68/b in Aug 2025 to $59/b in Q4 2025, and to ~$50/b in early 2026, driven by inventory builds averaging >2 mb/d as OPEC+ increases output. Prices are expected to average $51/b in 2026.
- Gasoline prices: The U.S. retail average for regular-grade is expected at $3.10/gal in 2025 (-20¢ YoY), dropping further to $2.90/gal in 2026, with all regions but the West Coast averaging below $3.00.
- Gasoline expenditures: Outlays are projected to fall to <2% of disposable personal income in 2025, the lowest share since at least 2005 (ex-2020 pandemic year).
- Gasoline consumption: First projected increase for 2026 in recent outlooks, supported by lower prices and higher working-age population.
- Natural gas prices: Henry Hub is forecast to rise from $2.91/MMBtu in Aug to $3.70 in Q4 2025 and $4.30 in 2026, reflecting stable production and growing LNG exports.
- U.S. drilling: With oil prices declining and gas prices rising, 2026 drilling is expected to shift toward gas-focused regions; crude production is forecast to decline ~1% YoY.
- Electricity generation: U.S. output is projected to rise +2.3% in 2025 and +3.0% in 2026, with solar supplying the largest share of growth amid surging demand from data centers and industrial users.
The EIA’s August 2025 Short-Term Energy Outlook lowered its Brent crude forecast for 2025 to $67/bbl (-2.4% vs prior) and for 2026 to $51/bbl (-12.0%), citing larger global inventory builds from accelerated OPEC+ production increases.
- Global oil inventory builds are now seen at +1.6 mb/d in 2025 (+0.6 mb/d vs prior) and +1.4 mb/d in 2026 (+0.3 mb/d).
- OPEC+ crude output was revised up to 43.7 mb/d in 2025 (+1.0%) and 44.2 mb/d in 2026 (+0.9%).
- U.S. crude production was nudged to 13.4 mb/d in 2025 (+0.3%) but trimmed to 13.3 mb/d in 2026 (-0.7%) as lower prices curb drilling.
- U.S. crude inventories are now expected at 433 mb in 2025 (+6.9% vs prior) and 448 mb in 2026 (+11.9%).
- Retail gasoline prices are forecast to average <$2.90/gal in 2026 (-6% YoY), while distillate inventories are set to remain at multi-decade lows due to strong export demand and limited refinery capacity.
The EIA’s July 2025 Short-Term Energy Outlook raised its 2025 forecast for Brent crude and U.S. ethane exports while cutting natural gas and Henry Hub price forecasts due to higher storage levels and policy changes.
- Brent crude is now forecast to average $69/bbl in 2025 (+4.4% vs prior), driven by a geopolitical risk premium from rising tensions over Iran.
- U.S. ethane net export forecasts jumped to 0.51 mb/d for 2025 and 0.64 mb/d for 2026 following the removal of license restrictions on exports to China.
- The Henry Hub spot price forecast was revised down -8.7% to $3.70/MMBtu for 2025 and -9.6% to $4.40 for 2026 amid ample gas storage.
- U.S. natural gas inventories are now expected to total 3,290 bcf in 2025, up 6.6% from last month’s forecast, while 2026 inventories were revised down -1.9% to 2,830 bcf.
- The crude oil production forecast fell slightly from 13.42 mil b/d to 13.37 mil b/d in 2025, with falling prices expected to reduce drilling activity.
The EIA’s June 2025 Short-Term Energy Outlook lowered its forecast for U.S. ethane exports and production, while projecting rising global oil inventories and electricity demand through 2026.
- U.S. ethane net export forecasts were cut -24.2% for 2025 and -51.1% for 2026 following license denials for exports to China; production was revised down -4.2% and -12.1%, respectively.
- Global oil inventory builds were revised up to +0.8 million b/d in 2025 (vs +0.4 prev), and down to +0.6 million b/d in 2026 (vs +0.8 prev).
- Brent crude prices are expected to average $61/b by year-end 2025 and $59/b in 2026 amid rising inventories.
- U.S. commercial electricity sales are now forecast to rise 3% in 2025 and 5% in 2026, led by data center demand in ERCOT and PJM.
- U.S. secondary coal inventories were revised down to 120 million short tons in 2025 (-2.7%) and 105 million in 2026 (-8.7%) as more coal is expected to be used in power generation.
The EIA’s May 2025 Short-Term Energy Outlook includes key downward revisions to economic growth and global oil balances, while coal inventories and production expectations were raised.
- Global oil inventory builds were revised lower by -0.1 million b/d for 2025 but raised by +0.1 million b/d for 2026, reflecting shifting supply-demand balances.
- The EIA’s global liquid fuels production forecast of increases between 1.3 and 1.4 million b/d in 2025 and 2026 were unchanged as the models were made before OPEC+ announced production increases on May 3rd.
- U.S. secondary coal inventory forecasts increased to 121 million short tons in 2025 (+11.6%) and 116 million short tons in 2026 (+16.5%), with higher production also expected.
- U.S. coal production was revised up to 506 million short tons in 2025 and 475 million in 2026, driven by higher expected use in power generation.
- U.S. GDP growth was revised down to 1.5% for 2025 (from 2.0%) and 1.6% for 2026 (from 2.0%) amid weaker macroeconomic expectations under new trade policy assumptions.
- World GDP was revised down -0.3 ppts to 2.8% for 2025 and -0.4 ppts to 2.8% for 2026 due to global trade friction and slower economic momentum.
Notable forecast changes in the April 2025 edition of the EIA’s Short-Term Energy Outlook:
- The EIA has dropped its forecast for Brent crude oil prices significantly, by -8.6% for 2025 and by -10.2% for 2026, as it sees uncertainty around global oil demand growth (downside risks) and a potential for more supply from OPEC+ in the coming months.
- The recent updates to trade policy have caused the EIA to see significantly lower global oil demand growth to 0.9 million b/d for 2025 (down -0.4 million b/d) and to 1.0 million b/d for 2026 (down -0.1 million b/d).
- The EIA sees propane inventories rising more than previously expected and spot prices declining more than previously expected. The EIA expects that China’s retaliatory tariffs on U.S. goods will have the largest effect on propane. China is major importer of U.S. propane, and tariffs will likely limit China’s demand for U.S. propane exports.
- Like propane, the EIA expects coal exports to China to be lower due to retaliatory tariffs. It also upgraded its coal production forecast slightly as there was strong-than-expected output in March. As a result of these dynamics, the April 2025 coal inventory forecasts compared to the March 2025 forecasts are 6.1% higher in 2025 and 24.1% higher in 2026.
- The EIA upgrades its estimates of LNG exports for 2025 as two new LNG export facilities ramp up operations. Plaquemines LNG Phase 1, which started operations late last year, has been ramping up exports more quickly than the EIA initially forecasted.
The EIA made large revisions to its natural gas forecasts.
- The Henry Hub spot price forecast for 2025 and 2026 were revised up 10.7% and 7.6% respectively.
- The forecast for natural gas consumption for 2025 was revised up 1.4%, and the forecast for inventories was revised down -3.8%.
- The revision in natural gas fundamentals comes from expectations of higher electric power generation (revised up 0.9%) due to a hotter weather forecast for the year.
The EIA maintains most of its short-term energy forecasts in February with a few changes:
- US oil production is expected to be slightly stronger in 2025 at 13.6 million b/d, up from 13.5 million b/d in the January STEO.
- A streak of cold weather in January pushed the forecast for Henry Hub natural gas prices in 2025 from $3.00 in the January STEO to $3.80 in the February STEO as inventories see above-average draws in January. Natural prices are expected to reach $4.20 in 2026.
- The distillate fuel oil inventory forecast was revised down from 118.4 mil bbls in January to 112.2 mil bbls in February on expectations of strong demand.
The EIA’s Short-Term Energy Outlook sees Brent crude oil trending around $74 a barrel in 2025, down -8% from 2024, as global oil production is expected to grow more than global oil demand. US production is expected to make another all-time high in 2025, reaching 13.5 million b/d and eventually 13.6 million b/d in 2026. OPEC+ is also expected to increase production in 2025 which will lead to larger global oil stock builds and put downward pressure on prices from the supply side.

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