Gas prices expected to fall to $3 per gallon by 2026, EIA forecasts

Oil and gasoline prices are expected to decline next year, according to the latest forecast from the Energy Information Administration (EIA).

The EIA published its November Short-Term Energy Outlook last month, which projected that the price of Brent crude oil will decline from $69 a barrel in 2025 to $55 a barrel next year. That would be well below the $81 per barrel that prevailed in 2024.

Gas prices are also projected to continue their decline into next year. Retail gas prices averaged $3.30 a gallon in 2024 and are at $3.10 a gallon this year, but are projected to decline further to $3 a gallon in 2026, according to the EIA’s report.

U.S. production of crude oil picked up this year and is expected to remain at the level in 2026, with the EIA finding the U.S. produced 13.2 million barrels per day in 2024. The agency projected crude oil production will be 13.6 million barrels per day this year – the same as in 2026.

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Natural gas prices are expected to continue to rise after a notable increase this year. The natural gas price at Henry Hub was $2.20 per million British thermal units (BTUs) in 2024 and rose to $3.50 this year, while the EIA forecasts its rise will continue to $4 in 2026.

In recent years, the U.S. has become the world’s largest exporter of liquefied natural gas (LNG), holding the top position in 2023 and 2024, and export levels have continued to rise.

EIA noted that the U.S. exported 12 billion cubic feet per day of LNG last year, with that figure rising to 15 billion cubic feet per day in 2025 and 16 billion cubic feet per day next year.

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The EIA’s report also broke down the share of electricity generation by source across the U.S., which showed natural gas as the largest source with a 40% share in 2025 and 2026, down slightly from 42% a year ago. 

The share of electricity generated by renewables – a category which includes hydropower, solar, wind, geothermal and biomass – accounted for 23% in 2024 and has been on an upward trend, with EIA putting its 2025 share at 24% and forecasting a rise to 26% next year.

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Nuclear power’s share of the power mix decreased slightly from 19% to 18% from 2024 to 2025, while it’s expected to hold steady at 18% next year.

Coal’s share of total electricity generation has also been relatively flat, with EIA reporting it was at 16% last year, 17% in 2025, and projecting a return to 16% next year.

The report also touched on emissions of carbon dioxide (CO2), which rose slightly from 4.8 billion metric tons in 2024 to 4.9 billion metric tons this year. EIA forecasts it will return to 4.8 billion metric tons next year.