EIA Sees WTI Dip to the High-$40 Range Next Year

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Commodity prices by 2026 are expected to whipsaw, with the U.S. benchmark for natural gas jumping on exports and oil prices cratering due to foreign supply-side pressures, the federal government said.

Crude oil prices so far this year have been range-bound, lingering largely in the mid-$60-per-barrel range for West Texas Intermediate (WTI), the U.S. benchmark for the price of crude oil.

In pre-market trading on Wednesday, WTI was trading at around $63 per barrel. That may be a burden on shale drillers fretting over market prices as successive quarterly surveys from the Federal Reserve Bank of Dallas found WTI already may be too low for profit-making.

Prices are under pressure from the supply side as OPEC+, the Organization of the Petroleum Exporting Countries and non-member state allies, unwinds voluntary production restraint and puts more barrels on the market.

On Tuesday, the U.S. Energy Information Administration (EIA), the statistical arm of the Energy Department, revised its forecast for WTI sharply lower as a result.

EIA estimates WTI will average $63.58 this year, a 2.5% revision lower from the July estimate. By next year, WTI could fall to $47.77 per barrel, a 12.8% reduction from its prior forecast.

"The price forecast is driven largely by more oil inventory builds following OPEC+ members' decision to accelerate the pace of production increases," EIA analysts wrote.

Early in the second quarter, upstream services firm Halliburton Company (Houston, Texas) reported that its net income fell by 33% relative to the second quarter of 2024. President and Chief Executive Officer Jeff Miller said he expected the market would be softer than previously expected.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project and Plant databases can read a report on Halliburton's warnings for the second quarter in July 23, 2025, article - Halliburton Sees Trouble Ahead.

Kaes Van't Hof, the director and chief executive officer at Diamondback Energy Incorporated (Midland, Texas), later sent a letter to shareholders saying that, at current prices, shale oil production may have already peaked.

EIA analysts said that well efficiencies mean U.S. crude oil production could flirt with an all-time high of 13.6 million barrels per day (BBL/d) by December, though upstream activity is expected to decline as oil prices move lower.

"We forecast U.S. crude oil production will decline to 13.1 million BBL/d by 4Q26," analysts wrote. "On an annual basis, we now forecast crude oil production will average 13.4 million BBL/d in 2025 and 13.3 million BBL/d in 2026."

On natural gas, analysts are expecting prices will remain elevated relative to year-ago levels. Henry Hub averaged $2.19 per million British thermal units (MMBtu) last year, and the EIA expects it to reach $3.90/MMBtu by the fourth quarter and average $4.30 by next year.

"Rising natural gas prices reflect relatively flat natural gas production amid an increase in U.S. liquefied natural gas exports," the August monthly report read.

It was 2014 the last time Henry Hub was in the $4 range on average. While U.S. natural gas production is on pace to decline marginally by next year, exports of liquefied natural gas (LNG) are expected to increase by nearly 7% annually by 2025.

The United States is already the world leader in LNG exports. Returning to the White House for a second, non-consecutive term in office, President Donald Trump has argued for more, claiming it was necessary for the security of U.S. allies.

That could trickle down to the consumer. While the index for piped gas declined 0.9% month-on-month to July, U.S. taxpayers have seen utility prices increase by 14% annually, the Bureau of Labor Statistics reported Tuesday.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).