Forecast overview

• This edition of our Short-Term Energy Outlook (STEO) is the first to include forecasts for 2027.

• Global oil prices. We expect oil prices will decline in 2026, as global oil production exceeds global oil demand, causing oil inventories to rise. Global inventories continue increasing into 2027, albeit at a slower pace. We forecast the Brent crude oil price will average $56 per barrel (b) in 2026, 19% less than in 2025, then average $54/b in 2027.

• Global oil production. We expect global production of liquid fuels will increase by 1.4 million barrels per day (b/d) in 2026 and 0.5 million b/d in 2027. Global liquid fuels production growth in 2026 is driven by crude oil production growth in OPEC+, while production growth in 2027 is driven by countries outside of OPEC+, primarily in South America. Our forecast assumes existing sanctions on Venezuela remain in place through 2027.

• U.S. crude oil production. After reaching an annual record of 13.6 million b/d in 2025, we forecast U.S. crude oil production will decrease in the forecast, declining by less than 1% in 2026 and by 2% in 2027. With sustained lower crude oil prices, we expect crude oil production will decrease as the slowdown in drilling activity will outpace increases in drilling productivity. The West Texas Intermediate price averages $52/b in 2026 and $50/b in 2027 in our forecast, down from $65/b in 2025.

• U.S. gasoline prices. Retail gasoline prices in our forecast for 2026 and 2027 are lower compared with 2025, which largely reflects our forecast of lower crude oil prices. We forecast U.S. gasoline prices in 2026 will average just over $2.90 per gallon (gal), a decrease of nearly 20 cents/gal from 2025. In 2027, we forecast prices to remain mostly flat at an annual average of just over $2.90/gal.

• Natural gas prices. We expect the spot price of natural gas at Henry Hub to average just under $3.50 per million British thermal units (MMBtu) in 2026, down 2% from 2025, and average $4.60/MMBtu in 2027. Natural gas prices increase in our forecast because growth in demand—led by expanding liquefied natural gas exports and more natural gas consumption in the electric power sector—will outpace production growth.

• Electricity consumption. We forecast electricity consumption will grow by 1% in 2026 and 3% in 2027, marking the first four years of consecutive growth since 2005–07, and the strongest four-year period of growth since the turn of the century. Rising electricity consumption in our forecast is mostly the result of growing power demand in the commercial and industrial sectors.

• Electricity generation. Solar power supplies the largest increase in power generation in the forecast. We expect 69 gigawatts of solar capacity additions during the forecast period, leading to a 21% increase in solar generation during both 2026 and 2027. We expect natural gas generation will remain flat in 2026 and rise by 1% in 2027. Generation from coal-fired power plants falls by 9% in 2026, followed by a less than 1% decrease in 2027.

You can find more information in the detailed table of forecast changes.