Overview
The U.S. Energy Information Administration said Tuesday that U.S. crude oil production is forecast to hit 13.9 million barrels per day (bpd) in 2026, marking a fourth straight year of all-time annual output records. The EIA projects output will advance further to 14.3 million bpd in 2027.
Price outlook and market forces
The agency placed its Brent crude price forecast at an average of $97 per barrel in 2026, with a decline to $86 per barrel expected in 2027. The EIA reported that prices rose for three consecutive months through October, attributing that upward movement to falling global inventories, attacks on oil tankers in the Persian Gulf, constrained shipping capacity, and higher transportation costs that tightened supply.
Looking ahead, the EIA expects oil prices to drift lower toward the end of next year as most non-Iran Middle East production returns to pre-war output levels and as depleted oil inventories are rebuilt.
Inventories, exports and refinery activity
A widening gap between Brent futures and West Texas Intermediate helped bolster U.S. crude exports, the agency said. Strong refinery crude runs, combined with those export flows, pushed U.S. domestic stocks down to 410 million barrels by the end of October - the lowest end-of-October level in 12 years according to the EIA's reporting.
With crude production set to rise into next year and the Brent-WTI spread expected to narrow, the EIA anticipates a gradual replenishment of inventories over time.
Fuel price forecasts
The EIA revised pump-price expectations for diesel and gasoline in 2027. Diesel is now forecast to average $5.03 per gallon in 2027, a higher projection than the agency's previous estimate of $4.49 per gallon. Gasoline is forecast to average $3.73 per gallon in 2027, up from a prior forecast of $3.56 per gallon.
Open questions
The report raises questions about which producers or regions may feel the effects of rising U.S. output first and what will sustain production at the projected record 13.9 million bpd level. The EIA's published forecasts describe the anticipated path for output, prices and stocks but do not single out specific producers or regions as immediate beneficiaries.
Implications
The EIA's outlook links supply-side developments - notably increased U.S. production and the projected return of most non-Iran Middle East output to pre-war levels - with downward pressure on prices later in the forecast horizon. In the nearer term, inventory lows and a wide Brent-WTI differential have supported exports and tightened domestic supply.
Note: This report reflects the EIA's published forecasts and the agency's assessment of recent market dynamics. It does not introduce additional data or outside analysis beyond what the EIA reported.