U.S. ENERGY INFORMATION ADMINISTRATION
WASHINGTON DC 20585
FOR IMMEDIATE RELEASE
May 6, 2025
EIA expects lower crude oil prices and higher natural gas prices through 2026
The U.S. Energy Information Administration (EIA) expects recent developments in global trade policy and oil production to contribute to lower global demand for petroleum products through 2026, contributing to lower oil prices than it previously forecast.
In its May Short-Term Energy Outlook (STEO), EIA also forecasts natural gas prices to increase from historic lows in 2024.
| U.S. energy market indicators | 2024 | 2025 | 2026 |
|---|---|---|---|
| Brent crude oil spot price (dollars per barrel) | $81 | $66 | $59 |
| Retail gasoline price (dollars per gallon) | $3.30 | $3.10 | $3.10 |
| U.S. crude oil production (million barrels per day) | 13.2 | 13.4 | 13.5 |
| Natural gas price at Henry Hub (dollars per million British thermal units) | $2.20 | $4.10 | $4.80 |
| U.S. liquefied natural gas gross exports (billion cubic feet per day) | 12 | 15 | 16 |
| Shares of U.S. electricity generation | |||
| Natural gas | 42% | 40% | 40% |
| Coal | 16% | 16% | 15% |
| Renewables | 23% | 25% | 27% |
| Nuclear | 19% | 19% | 19% |
| U.S. GDP (percentage change) | 2.8% | 1.5% | 1.6% |
| U.S. CO2 emissions (billion metric tons) | 4.8 | 4.8 | 4.7 |
| Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, May 2025 Note: Values in this table are rounded and may not match values in other tables in this report. |
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Some key highlights from the May STEO include:
- Oil supply, demand, and prices: EIA expects the Brent crude oil price to average about $66 per barrel in 2025 and about $59 per barrel in 2026, both significantly lower than the 2024 average of $81 per barrel.
- Compared with the January STEO—the first STEO to include forecasts for 2026—EIA’s current forecast for global petroleum demand is about 500,000 barrels per day lower. EIA expects lower demand for petroleum products—such as gasoline, diesel, and jet fuel—along with increased oil production will lead to a generally oversupplied oil market, pushing oil prices down; EIA’s May forecast for 2026 oil prices is $8 per barrel lower than its January forecast.
- As with all EIA forecasts, its forecast for crude oil prices is highly uncertain, specifically related to possible changes in U.S. and global crude oil production and petroleum demand trends. Notably, EIA concluded this forecast on May 1, which was before the latest OPEC+ meeting, on May 3.
- U.S. ethane: China waived a 125% tariff on U.S. ethane imports it levied in early April. The tariff removal led EIA to expect strong growth in U.S. ethane production and exports. EIA expects the United States to produce nearly 3 million barrels per day of ethane this year and slightly more than 3 million barrels per day of ethane next year, up from 2.8 million barrels per day in 2024. Most of this growth in U.S. ethane production will be exported to supply growing international demand.
- Natural gas prices: EIA expects natural gas prices to increase to about $4.20 per million British thermal units (MMBtu) on average in the third quarter of 2025. That price is about 80 cents per MMBtu higher than the April average and almost double the price from last year.
- Electricity generation: EIA expects the U.S. power sector to generate 2% more electricity this year than it did in 2024, but generation from U.S. natural gas-fired power plants declines by 3% in the agency’s forecast, partially driven by rising natural gas prices. EIA expects rising natural gas prices to also contribute to a 6% increase in coal-fired generation.
- U.S. solar generation continues to increase the most in electricity generation in the STEO forecast, increasing by 34% in 2025 and 18% in 2026.
- Coal markets: With U.S. coal-fired power plants generating more electricity this year, EIA now expects U.S. coal production to total more than 500 million short tons in 2025, an upward revision from the April forecast.
- Trade policy assumptions: The U.S. macroeconomic outlook EIA uses in the Short-Term Energy Outlook (STEO) is based on S&P Global's macroeconomic model. S&P Global’s most recent model reflects the tariffs announced on April 2, but the model was finalized prior to the temporary 90-day tariff suspension granted to certain countries. As a result, EIA’s macroeconomic forecast assumes significantly lower tariffs on China’s products than are currently in place and significantly higher tariffs on countries subject to the 90-day temporary suspension. These differences in tariff rates likely have offsetting effects on the macroeconomic forecast.
The full May 2025 Short-Term Energy Outlook is available on the EIA website.
The product described in this press release was prepared by the U.S. Energy Information Administration (EIA), the statistical and analytical agency within the U.S. Department of Energy. By law, EIA’s data, analysis, and forecasts are independent of approval by any other officer or employee of the U.S. government. The views in the product and this press release therefore should not be construed as representing those of the U.S. Department of Energy or other federal agencies.
EIA Program Contact: Tim Hess, STEO@eia.gov
EIA Press Contact: Chris Higginbotham, EIAMedia@eia.gov