EIA Forecasts Crude Oil Prices Will Slide in 2026
The U.S. Energy Information Administration is not optimistic about the price of crude oil in the coming year.
It predicts the global benchmark Brent crude will drop to about $55 a barrel early in 2026. The disclosure came in the agency’s Short-Term Energy Outlook released this week.
Global Oil Prices
The EIA expects global oil inventories to continue rising through 2026, placing downward pressure on oil prices in the coming months.
The agency forecasts the Brent crude oil price will fall to an average of $55 per barrel (b) in the first quarter of 2026 (1Q26) and remain near that price for the rest of next year.
Although the forecast expects crude oil prices to continue falling in the coming months, the agency assesses that both the OPEC+ production policy and China’s continued inventory builds will limit price declines.
Those two forces — coordinated production decisions by OPEC+ and inventory accumulation by China — remain the key stabilizing factors as global supplies rise.
Natural Gas Prices
The forecast also addresses natural gas pricing at the Henry Hub.
The Henry Hub natural gas spot price in the EIA’s forecast rises to an average of almost $4.30 per million British thermal units (MMBtu) this winter (November–March). That level runs more than 40 cents/MMBtu higher than the November STEO forecast.
The agency ties the upward revision primarily to colder-than-expected weather in December, which it expects will increase space heating demand.
However, the EIA expects milder-than-normal weather in early 2026, and it reports that rising production will help moderate natural gas prices following the winter, with the Henry Hub price averaging about $4.00/MMBtu next year.
Electricity Generation
The EIA now forecasts that U.S. electricity generation by the power sector will grow by 2.4% in 2025 and by 1.7% in 2026.
This growth breaks sharply from the relatively flat generation seen from 2010 to 2020.
The agency ties the renewed growth primarily to rising demand from large customers, including data centers, with demand concentrated in regions managed by:
-
The Electric Reliability Council of Texas (ERCOT)
-
The PJM Interconnection
The EIA also reports that it reduced its forecast for generation growth in 2026 compared with last month’s STEO, based on:
-
How much large-load electricity demand has come online so far this year
-
What that demand indicates for near-term growth trajectories
Coal Consumption and Production
The EIA expects coal consumption to increase by 9% in 2025, driven by an 11% increase in coal consumption in the electric power sector this year as:
-
Natural gas costs increased
-
Electricity demand increased
Coal consumption falls in 2026, however, as electric power generation from renewable sources increases.
Even with that decline in consumption, the agency reports that coal production will fall by less than consumption next year, which will:
-
Support a small increase in coal exports
-
Drive rising coal inventories
Forecast Released in STEO
The EIA released the full outlook in its Short-Term Energy Outlook (STEO), which tracks:
-
Oil inventories and pricing trends
-
Natural gas spot pricing
-
Electricity generation growth
-
Coal consumption, production, and export dynamics
The full report appears at the EIA’s official website.