US natural gas inventories are expected to reach 3,985 billion cubic feet in October 2026, providing the country with its largest pre-winter supply cushion since 2016, according to the US Energy Information Administration’s August Short-Term Energy Outlook.
The stronger storage forecast reflects robust domestic natural gas production and reduced feedgas demand caused by maintenance at liquefied natural gas export facilities. EIA Administrator Tristan Abbey said higher inventories during the fall would provide additional protection against rising heating-related gas consumption during winter.
US LNG exports forecast at 16.5 Bcf per day
EIA expects US LNG exports to average 16.5 Bcf per day in the third quarter of 2026, slightly below its July forecast because of continuing maintenance at Freeport LNG. Lower feedgas demand pushed natural gas storage in the South Central region above the five-year average at the end of July.
Meanwhile, Mexico’s new Energia Costa Azul LNG terminal and increased US natural gas consumption for electricity generation are supporting higher pipeline exports. Total US natural gas exports are forecast to continue growing through 2027.
Henry Hub natural gas price cut by 50 cents
The Henry Hub spot price is expected to average $2.87 per million British thermal units during the third quarter of 2026. This is 50 cents per MMBtu below EIA’s July projection.
Reduced demand from LNG export facilities, strong natural gas production and near-record storage levels are expected to keep Henry Hub prices below $3.00 per MMBtu in the coming months.
Brent crude oil price to average $85 in third quarter
EIA raised its estimate of shut-in crude oil production in the Middle East because of continued severe constraints affecting transit through the Strait of Hormuz. The forecast assumes these restrictions will persist through August.
Lower oil shipments are expected to reduce global inventories and keep Brent crude oil prices at around $85 per barrel in the third quarter of 2026. EIA expects most Middle Eastern crude production to return to near pre-conflict averages in early 2027.
However, disruptions of approximately 0.6 million barrels per day are forecast to continue through the end of 2027. As production recovers and global inventories rebuild, Brent crude is projected to gradually decline to an average of $69 per barrel in 2027.
US crude oil inventories remain under pressure
US commercial crude oil inventories are expected to remain below the five-year low, covering 2021–2025, through the end of 2026.
High refinery runs since mid-April, increased crude oil exports and reduced imports have contributed to consistent weekly declines in US crude stocks. Net crude oil imports are forecast to stay below average through 2027, reflecting strong international demand for US oil exports.
Texas electricity growth forecast drops to 6 percent
Rising data-center consumption has been an important driver of US electricity demand. However, Texas Governor Greg Abbott announced a pause on new data-center development on August 3, prompting EIA to substantially lower its electricity outlook for the state.
Texas electricity load is now expected to grow by 6 percent in 2027, compared with the 14 percent growth projected in the July Short-Term Energy Outlook.
Solar generation jumps 21 percent
Renewable electricity generation recorded strong growth during the first half of 2026 compared with the first half of 2025. Solar generation increased 21 percent, hydropower rose 9 percent and wind generation advanced 6 percent.
Combined renewable generation increased 11 percent in early 2026, supported by new solar projects. EIA expects continued renewable energy capacity additions to sustain generation growth through 2027.
Natural gas-fired electricity generation increased 2 percent during the first half of 2026 and is forecast to grow further in 2027 as gas prices remain relatively low. Coal-fired generation is expected to decline as electricity producers shift toward lower-cost natural gas.
US coal export forecast raised to 102 million short tons
Strong shipments during April and May prompted EIA to increase its 2026 US coal export forecast to 102 million short tons.
Metallurgical coal exports expanded throughout the first half of 2026, supported by new and reopened mines. Steam coal exports declined in the first quarter of 2026 before recovering in the second quarter as natural gas-to-coal switching in Europe and Asia improved demand for US coal.
SHAFANA FAZAL
