Forecast overview

• Global oil prices. The Brent crude oil price in our forecast declines significantly in the coming months, falling from $71 per barrel (b) in July to $58/b on average in the fourth quarter of 2025 (4Q25) and around $50/b in early 2026. The price forecast is driven largely by more oil inventory builds following OPEC+ members’ decision to accelerate the pace of production increases. We now expect global oil inventory builds will average more than 2 million barrels per day (b/d) in 4Q25 and 1Q26, which is 0.8 million b/d more than in last month’s STEO. Low oil prices in early 2026 will lead to a reduction in supply by both OPEC+ and some non-OPEC producers, which we expect will help moderate inventory builds later in 2026. We forecast the Brent crude oil price will average $51/b next year, down from our forecast of $58/b in last month’s STEO.

• U.S. crude oil production. We expect increases in well productivity will push U.S. crude oil production to an all-time high near 13.6 million b/d in December 2025. However, as crude oil prices fall, we expect U.S. producers will accelerate the decreases in drilling and well completion activity that have been ongoing through most of this year, and we forecast U.S. crude oil production will decline to 13.1 million b/d by 4Q26. On an annual basis, we now forecast crude oil production will average 13.4 million b/d in 2025 and 13.3 million b/d in 2026.

• U.S. gasoline prices. Lower crude oil prices push down retail prices for petroleum products in our forecast. We expect the price for retail gasoline across the U.S. will average less than $2.90 per gallon (gal) next year, about 20 cents/gal (6%) less than this year.

• U.S. distillate inventories. U.S. total distillate fuel inventories in our forecast end 2025 at the lowest end-of-year level since 2000, after decreasing 14% over the course of the year primarily due to increased U.S distillate exports and increased demand for petroleum-based distillate. We expect lower domestic distillate production because of decreased U.S. refinery capacity and continued strong export demand to keep inventory levels low throughout the forecast period, with distillate inventories remaining relatively flat in 2026. Ongoing low inventories will keep distillate fuel refining margins high during the forecast period.

• Natural gas prices. We expect the Henry Hub natural gas spot price will rise from an average of $3.20 per million British thermal units (MMBtu) in July to $3.90/MMBtu in 4Q25 and $4.30/MMBtu next year. Rising natural gas prices reflect relatively flat natural gas production amid an increase in U.S. liquefied natural gas exports.

• Electricity consumption. Electricity demand growth in our forecast is driven by the commercial and industrial sectors. We expect electricity sales to the commercial sector to rise by 3.0% in 2025 and 4.5% in 2026, driven largely by more demand from data centers, while electricity sales to industrial consumers rise by 2.0% in 2025 and 3.5% in 2026.

• Coal exports. We forecast a 10% decline in coal exports in 2025, reflecting a global market characterized by persistent oversupply and lower coal prices for both steam and metallurgical coal. Steam coal exports in our forecast fall 7% this year to 47 million short tons (MMst) and decline 5% in 2026 to below 45 MMst. Metallurgical coal exports fall 13% this year to 50 MMst in 2025 and remain near that level next year.

• Trade policy assumptions. The U.S. macroeconomic outlook we use in STEO is based on S&P Global’s macroeconomic model. S&P Global’s most recent model reflects the tariffs announced in April and includes the 90-day temporary suspension of tariffs granted to most countries. S&P Global’s model assumes reduced tariffs on imports from China compared with last month, but the model assumes tariffs on imports from other countries to remain at 10% after the 90-day pause expired in July.

You can find more information in the detailed table of forecast changes.