Gas and Oil Prices Expected to Decline, Says EIA

U.S. Energy Secretary Chris Wright addressed the falling average gasoline prices during President Donald Trump’s administration, highlighting the growing need for dependable energy sources, particularly as new technologies like AI emerge, during a discussion on Kudlow.

The Energy Information Administration (EIA) recently shared its predictions for next year, suggesting a downward trend in oil and gasoline prices. In their latest short-term energy outlook for November, they forecasted a drop in Brent crude oil prices from $69 per barrel in 2025 to $55 per barrel in 2026, which is notably less than the anticipated $81 per barrel in 2024.

Retail gasoline prices are also expected to decrease further. The EIA estimates an average of $3.30 per gallon in 2024, dipping to $3.10 this year, and continues to predict it will fall to $3 per gallon by 2026.

On the production side, U.S. crude oil output has increased this year and is projected to remain steady at around 13.6 million barrels per day through 2026. The EIA estimates that production will be 13.2 million barrels per day in 2024.

Interestingly, Natural gas prices have seen significant increases this year and are on track to rise even more. Prices at Henry Hub climbed from $2.20 per million British thermal units (BTUs) in 2024 to $3.50 this year, and they are expected to reach $4 per million BTUs by 2026.

In recent years, the United States has become the leading exporter of liquefied natural gas (LNG). Export levels are set to climb, with 12 billion cubic feet of LNG exported per day last year, projected to increase to 15 billion cubic feet per day in 2025 and 16 billion cubic feet next year.

Natural gas remains the largest source of power generation in the U.S., claiming a 40% share in 2025 and 2026, down slightly from 42% in the previous year. Meanwhile, renewable energy sources are gaining momentum, projected to represent 26% of electricity generation by next year, up from 23% in 2024.

The EIA also indicated that while coal’s share in electricity generation has remained stable at around 16% last year and is expected to hover around 16-17% in the coming years, there’s a slight decline in the nuclear power share, dropping from 19% to 18% between 2024 and 2025.

Lastly, CO2 emissions have slightly risen from 4.8 billion tons in 2024 to 4.9 billion tons this year, with expectations to decrease back to 4.8 billion tons next year.