EIA Sees Lower 2026 Oil, Gasoline Prices, Increased U.S. Driving

The U.S. Energy Information Administration (EIA) projects that crude oil prices will decline in the near term due to oversupply and weakening demand, leading to lower gasoline prices at the pump. In 2026, the average retail price for regular gasoline is expected to fall below $3 per gallon in all U.S. regions except the West Coast, while gasoline consumption is forecast to increase by 0.3%, driven by a larger working-age population and lower fuel costs. This will result in motorists spending a smaller share of their disposable income on gasoline, with expenditures likely to be the lowest since at least 2005, excluding the pandemic year. Meanwhile, the natural gas market is experiencing high volatility with regional price disparities influenced by pipeline constraints, LNG exports, and storage levels, while forecasts anticipate moderate price increases in 2026 due to potential drilling cutbacks linked to sustained low crude prices. The link between crude oil prices and natural gas supply remains critical, as continued low oil prices could tighten natural gas balances next year by slowing shale drilling activities.