Forecast overview

• Global oil prices. We expect the Brent crude oil price will decline significantly in the coming months, falling from $68 per barrel (b) 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. 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 September 7 that it plans to raise production by 137,000 b/d in October 2025.

• Gasoline prices. Falling oil prices in our forecast lead to a drop in gasoline prices. We expect the U.S. average retail price for regular-grade gasoline will average about $3.10 per gallon (gal) this year, down 20 cents/gal from last year. Retail gasoline prices in our 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. We estimate expenditures will average less than 2% of disposable income this year, down from an average of 2.4% over the previous decade.

• U.S. gasoline consumption. We now forecast a slight increase in U.S. gasoline consumption next year, the first Short-Term Energy Outlook in which we have forecast an increase for 2026. The forecast for rising gasoline consumption is driven by an upward revision to the number of people of working age compared with our previous forecasts, and lower gasoline prices compared with our forecasts from earlier this year.

• Natural gas prices. We expect 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. As a result, we expect drilling activity in the United States 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. Electricity generation has been growing rapidly this year as a result of growing demand for power from data centers and industrial customers. We expect that total U.S. generation by the electric power sector will grow by 2.3% in 2025 and a further 3.0% next year. We expect that solar power will supply the largest share of the increase in both years.

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