In its July Short Term Energy Outlook, the agency increased its price forecast for West Texas Intermediate through the end of 2025 but has lowered that forecast into 2026.
Driven by higher near-term prices in the aftermath of the Israel-Iran conflict, the EIA now forecasts WTI will average $66 in July, up from $59 last month. In August, WTI is expected to average $65, up from last month’s $59 and $63 in September, up from $58. The agency expects WTI to average $61 in October, up from $57, and $60 in November, up from $57. For December, WTI is forecast to average $59, up from $57.
For the first three months of 2026, the agency did not change its forecast of $56 WTI. For Apil, it lowered the average to $55 from $56. For May and June, the average is expected to be $56, down from $57. July and August are forecast to see WTI average $55, down from $56. In September, WTI is forecast to average $54, down from $55. For the final three months of 2026, the agency expects WTI to average $53, down from $54 in June’s outlook.
Despite the risk premium, EIA analysts expect significant global inventory builds will put consistent downward pressure on oil prices, as illustrated in the slightly lower prices in the July outlook. Analysts noted that the forecast was completed before OPEC and its allied producing nations announced higher production targets for outlook. The announced targets were somewhat higher than analysts assumed in preparing the July outlook.
Also in its July outlook, the EIA lowered its forecast for Henry Hub spot natural gas prices. Prices are now expected to average $3.40 per million British thermal units (MMBtu) in the third quarter and $3.70 per MMBtu for the year, both significantly lower than the June forecast. Analysts based their outlook on natural gas inventories. U.S. natural gas storage was about 7% above the five-year average at the end of June following a string of large storage injections from April to June. The agency now expects the U.S. will enter the winter heating season with inventories about 5% higher than forecast in the June outlook.
EIA analysts are also forecasting a decline in U.S. crude production from an all-time high of just over 13.4 million barrels per day in the second quarter to less than 13.3 million barrels per day by the fourth quarter of 2026. On an annual basis, analysts forecast U.S. crude production will average 13.4 million barrels per day in both 2025 and 2026. The attribute the decline to falling oil prices that have prompted producers to slow drilling and completion activity this year.
Mella McEwen