EIA Raises Oil Price Forecasts

Overview of the EIA's STEO Report

The U.S. Energy Information Administration (EIA) has released its latest Short-Term Energy Outlook (STEO) report, which includes significant revisions to its oil price forecasts. The agency anticipates a gradual improvement in oil flows through the Strait of Hormuz and an increase in oil supply in the coming months.

Price Forecast Adjustments

The EIA has raised its average West Texas Intermediate (WTI) price forecast for 2026 to $84.65 per barrel, up from $80.88. The Brent crude oil forecast has also been increased to $91.01 from $86.81. For 2027, the WTI forecast is now $69.74, up from $65.39, while the Brent forecast has been revised to $73.74 from $69.39.

Global Oil Production and Demand

Global oil production is expected to average 100.6 million barrels per day (bpd) in 2026, slightly down from the previous forecast of 100.8 million bpd. For 2027, the production forecast has been increased to 109.9 million bpd, up from 109.7 million bpd.

In terms of demand, global oil consumption in 2026 is projected at 102.6 million bpd, a minor decrease from the previous estimate of 102.7 million bpd. The 2027 demand forecast remains unchanged at 105 million bpd.

U.S. Oil Production and Demand

The EIA forecasts U.S. crude oil production to average 13.83 million bpd in 2026, consistent with prior estimates, and to rise to 14.26 million bpd in 2027, up from 14.15 million bpd. In the near term, production is expected to increase from 13.88 million bpd in August to 13.96 million bpd in September, averaging around 13.95 million bpd in October.

U.S. oil demand is projected to remain at 20.6 million bpd for 2026, with a slight increase to 20.8 million bpd in 2027.

Natural Gas Production and Demand

For natural gas, the EIA expects production to average 111.7 billion cubic feet per day (Bcf/d) in 2026 and 115.9 Bcf/d in 2027. Demand forecasts have been adjusted, with 2026 demand raised to 92.2 Bcf/d and 2027 demand slightly lowered to 94.3 Bcf/d.