The U.S. Energy Information Administration (EIA) has adjusted its forecast for U.S. crude oil production following record-breaking output in July 2025. In its October Short-Term Energy Outlook (STEO), the agency now expects U.S. crude oil production to average 13.5 million barrels per day (bpd) in both 2025 and 2026, slightly higher than its September forecast.
U.S. Crude Oil Production Hits New High
EIA data reveal that U.S. crude oil production reached a record 13.6 million bpd in July 2025, surpassing previous estimates. This strong performance has prompted the agency to revise its production outlook upward while noting that output is expected to gradually decline from this peak as oil prices moderate.
Global Oil Market Outlook
The October STEO highlights several key trends in the global energy market:
Oil Prices: EIA projects that global crude oil and petroleum product inventories will continue to grow through 2026, putting downward pressure on prices. Brent crude is expected to average $62 per barrel in Q4 2025 and drop further to $52 per barrel in 2026.
Global Production: Growth in oil production is expected to be driven mainly by countries outside OPEC+. While OPEC+ plans a production rebound, EIA anticipates actual output will remain below targets, limiting rapid price drops.
Market Uncertainties: The energy market faces uncertainties including refinery disruptions, such as the Chevron El Segundo fire, Ukraine’s attacks on Russian oil ports, and fluctuating oil purchases by China. These factors could influence future supply and demand dynamics.
U.S. Natural Gas and LNG Outlook
Natural Gas Prices: The Henry Hub natural gas spot price is projected to rise from just under $3.00/MMBtu in September to $4.10/MMBtu in January 2026, slightly lower than prior forecasts due to increased production.
LNG Export Capacity: The U.S. will expand liquefied natural gas (LNG) export capacity by 5 Bcf/d in 2025–2026 with new projects like Plaquemines LNG and Corpus Christi LNG Stage 3. Total U.S. LNG exports are expected to reach 15 Bcf/d in 2025 and 16 Bcf/d in 2026.
Coal Consumption Trends
The electric power sector consumed 15 percent more coal in H1 2025 compared to H1 2024, fueled by higher electricity demand and rising natural gas prices. EIA predicts coal use will slow in the latter half of 2025 and decrease in 2026 as utility-scale solar generation grows.
Key Takeaways
U.S. oil production is on track for record levels but may gradually decline as prices fall.
Global oil prices are expected to soften due to growing inventories and steady production.
Natural gas and LNG markets will expand, supporting exports while moderating prices.
Coal consumption is temporarily up but likely to decline with the rise of solar energy.
EIA’s revised forecast underscores the dynamic nature of U.S. and global energy markets, highlighting both opportunities and risks for producers, consumers, and investors in 2025–2026.
Baburajan Kizhakedath