The Energy Information Administration said in its November Short-Term Energy Outlook that oil and gasoline prices are expected to decline in 2026 while natural gas prices and U.S. liquefied natural gas exports rise, according to a Fox Business report. The outlook has implications for household budgets, inflation measures, energy producers and the U.S. electricity generation mix.
The EIA projects Brent crude will average $55 a barrel in 2026, down from an estimated $69 in 2025 and the roughly $81 average in 2024. Retail gasoline prices are forecast to fall to $3.00 a gallon in 2026 after averaging about $3.30 in 2024 and $3.10 in 2025, the agency reported. At the same time, the EIA expects Henry Hub natural gas prices to rise and U.S. LNG exports to expand, reflecting stronger global demand.
Why this matters
Energy prices are a direct input to consumer costs and to headline inflation readings that influence Federal Reserve decisions and fiscal policy. Lower oil and gasoline prices can relieve pressure on household budgets and on sectors such as trucking and air transport, while higher natural gas prices can raise costs for utilities, manufacturers and some consumers. The EIA outlook therefore matters to policymakers, markets and industry planners tracking near-term economic risks.
Background
The EIA, an independent agency within the U.S. Department of Energy, publishes the Short-Term Energy Outlook each month to provide officials and markets with a baseline for likely price, production and consumption trajectories. The November outlook incorporates recent production data, winter heating demand expectations, and planned or announced export and pipeline capacity, and it helps inform planning across government and the private sector. For more on related economic trends, see our Economy Coverage.
Across the last several years U.S. crude output rose as drilling and completion activity expanded, but the EIA now expects that pace of growth to moderate and level off near the mid-13 million barrels per day range. Meanwhile, the United States has become a larger LNG supplier to global markets, a shift that both supports domestic natural gas prices and links U.S. markets more closely to international demand and geopolitics.
Key projections and data
The November outlook lays out specific estimates for several commodities and energy indicators central to markets and policy.
- Brent crude: projected $69 a barrel in 2025 and $55 a barrel in 2026, after averaging about $81 in 2024.
- Retail gasoline: averaged roughly $3.30 a gallon in 2024, about $3.10 in 2025, and projected $3.00 in 2026.
- U.S. crude production: about 13.2 million barrels per day in 2024 and near 13.6 million barrels per day in both 2025 and 2026.
- Natural gas at Henry Hub: roughly $2.20 per million British thermal units in 2024, $3.50 in 2025, and projected $4.00 in 2026.
- LNG exports: about 12 billion cubic feet per day in 2024, 15 billion cubic feet per day in 2025, and 16 billion cubic feet per day in 2026, reflecting new export capacity coming online and higher global demand.
- Electricity generation shares: natural gas supplying about 40% of generation in 2025 and 2026, down from 42% a year earlier; renewables rising from about 23% in 2024 to 24% in 2025 and 26% in 2026.
- Carbon dioxide emissions: estimated at about 4.8 billion metric tons in 2024, a slight uptick to 4.9 billion metric tons in 2025, and a return to 4.8 billion metric tons in 2026.
Drivers of the outlook
The EIA attributes lower oil prices in part to expected slower growth in U.S. crude production and to global demand dynamics that keep upward pressure limited. Geopolitical risks and OPEC+ supply decisions remain potential upside price risks, the agency notes, because they can tighten global crude availability.
Natural gas price gains stem from stronger global LNG demand, increased U.S. export volumes and seasonal heating needs. As more U.S. export terminals operate at higher utilization, domestic Henry Hub prices become more sensitive to international markets, and pipeline and terminal constraints can amplify regional price moves.
Electricity generation shifts reflect steady additions of renewable capacity, state-level clean energy policies and market economics that favor low marginal-cost wind and solar generation. At the same time, natural gas and nuclear continue to provide baseload and flexible generation that supports grid reliability.
Reactions and implications
Lower projected oil and gasoline prices are likely to provide modest relief for consumers and could shave a small amount from headline inflation readings, easing pressure on household spending. That could alter near-term dynamics for consumer confidence and retail sales if prices behave as projected.
For producers, lower crude prices compress operating cash flow and may reduce incentives for new drilling or long-lead investments. Companies with higher production costs could delay projects, while those with stronger balance sheets may continue shareholder returns or selective investment.
Rising natural gas prices have mixed effects: they improve revenues for gas producers and support LNG industry employment and trade balances, but they increase input costs for energy-intensive manufacturers and can raise electricity bills in regions where gas-fired plants set the market price during peak periods.
Policy and infrastructure considerations
The outlook underscores policy tradeoffs. Expanding LNG exports boosts U.S. trade receipts and geopolitically positions the United States as a reliable supplier, but it also links domestic energy prices to global conditions and raises questions about energy affordability for households and industries. Policymakers face choices about permitting, infrastructure siting and incentives that affect long-term supply and resilience.
Grid planners and regulators must balance increasing renewable capacity with investments in transmission, storage and flexible generation to maintain reliability. Federal and state decisions on permitting, incentives and emissions standards will shape how quickly the generation mix changes and how that transition affects prices and emissions.
Analysis
The EIA projections highlight competing priorities for governance and markets. Lower oil and gasoline prices can reduce near-term inflation and ease cost pressures for consumers, but they also reduce fiscal and industry revenues that support jobs and investment in energy-producing regions. Those tradeoffs carry political and economic consequences for state budgets and local economies that depend on fossil fuel activity.
Growing U.S. LNG exports increase the country’s influence in global markets and support domestic production, but they also make domestic natural gas prices more responsive to international demand and potential supply shocks. That linkage elevates the importance of infrastructure policy, export terminal reliability and diversification of supply for energy security.
Finally, a gradual shift toward more renewable generation coexists with steady natural gas and nuclear output, underscoring the complex policy challenge of reducing emissions while protecting grid reliability and affordable power. The EIA outlook is a baseline, not a certainty, and actual outcomes will depend on production choices, weather, international demand and policy interventions that can alter the pace of change.
