EIA predicts oil prices to decrease despite market uncertainty

“The oil market is experiencing uncertainty from regional conflict, demand growth, and several other factors,” said EIA Acting Administrator, Steve Nalley. “Our forecast for lower oil prices comes from basic economic fundamentals that when supply grows faster than demand, prices decrease.”

The EIA expects lower oil prices to affect US gasoline prices and domestic oil production.

US energy market indicators

• Global oil supply and prices: EIA expects the Brent crude oil price to average US$69/bbl in 2025, which is US$3/bbl higher than in June’s forecast. EIA revised its forecast upward following higher near-term prices resulting from the geopolitical risks. EIA expects increasing global oil supply to continue pushing oil prices down in 2026, with the Brent price averaging US$58/bbl in the agency’s forecast.
• US crude oil production: declining oil prices have contributed to US oil producers slowing their drilling and completion activity this year. As a result, EIA expects US crude oil production to decline from an all-time high of 13.5 million bpd in the 2Q25 to about 13.3 bpd in the 4Q26. EIA expects US crude oil production to average about 13.4 million bpd in both 2025 and 2026.
• US gasoline prices: despite the revisions to EIA’s oil price forecasts, the agency still expects US regular-grade gasoline prices to average about $3.10/gal. in 2025 and $3.00/gal. in 2026, down from $3.30/gal.in 2024.
• Ethane production and exports: on 2 July 2025, the US Commerce Department rescinded export licence requirements that had effectively barred US ethane exports to China. As a result, EIA changed the domestic ethane production and exports forecast in the June STEO to align with expectation for growing trade between US ethane producers and petrochemical crackers in China.
• Natural gas storage and prices: US natural gas storage was about 7% above the 5 year average at the end of June 2025, following a string of large storage injections from April to June. EIA now expects that as the US enters the winter heating season, US natural gas inventories will be about 5% higher than in June’s forecast. EIA expects the Henry Hub spot price to average about $3.40 per million Btu in the 3Q25 and $3.70 per million Btu for the year, both significantly lower than the June forecast.
• Wholesale power prices: although EIA revised down its natural gas price forecast, the agency still expects natural gas prices to be significantly higher than the historic lows of 2024. Because natural gas is the primary source of US electricity generation, EIA expects natural gas prices to contribute to 12% higher wholesale electricity prices this summer compared with last summer.

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/09072025/eia-predicts-oil-prices-to-decrease-despite-market-uncertainty/