Lower Fuel Costs on the Horizon, EIA Says

EIA Forecast Signals Continued Declines

Oil and gasoline prices are poised to remain well below recent highs through 2026, according to the latest Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA). The agency’s November report projects Brent crude prices will fall from an average of $69 per barrel in 2025 to $55 per barrel next year — markedly lower than the $81 average recorded in 2024.

Gasoline prices are expected to follow the same trajectory. After averaging $3.30 per gallon in 2024 and drifting down to $3.10 this year, the EIA forecasts prices will edge down again to $3 in 2026.

U.S. Production Holds Strong

The United States continues to cement its role as a global energy powerhouse. Crude production climbed to 13.2 million barrels per day in 2024 and is projected to hold at 13.6 million barrels per day in both 2025 and 2026. At the same time, natural gas prices — in contrast to oil — are expected to rise modestly. Henry Hub prices jumped from $2.20 per MMBtu in 2024 to $3.50 this year, with forecasts showing an increase to $4 in 2026.

That growth is tied to U.S. leadership in liquefied natural gas exports. The nation shipped 12 billion cubic feet per day of LNG in 2024; that figure is projected to rise to 15 billion cubic feet per day this year and 16 billion next year.

Shifting Electricity Mix and Emissions Trends

Natural gas remains the dominant force in the U.S. electricity sector, supplying about 40% of generation in 2025 and 2026. Renewables — including solar, wind, hydropower, geothermal and biomass — continue their upward trajectory, rising from 24% of the power mix this year to an expected 26% in 2026.

Nuclear power is projected to hold steady at 18%, while coal continues to hover between 16% and 17%. Meanwhile, CO2 emissions ticked up slightly this year, from 4.8 billion metric tons in 2024 to 4.9 billion, before falling again to 4.8 billion in 2026.