Not only did some market expectations change, but EIA announced a new methodology in its December short-term energy outlook.
A recent cold snap in the U.S. will lead to higher winter heating costs, the EIA said.
The Henry Hub natural gas spot price is forecast to be 40 cents higher than the November forecast. That increase is driven by natural gas consumption for space heating, according to EIA.
Coal consumption increased in 2025 due to rising natural gas costs, but that trend is not expected to continue in 2026 as renewable energy generation increases.
U.S. electricity generation will grow through 2026, driven by increased demand from large customers, including data centers.
Global oil inventories will rise through 2026, and lower prices will follow. EIA is forecasting a Brent crude oil price of $55 per barrel by the first quarter of next year.
Fuel prices are expected to decline from $3.75 per gallon of diesel in the fourth quarter of 2025 to $3.60 by the first quarter of 2026. The decline continues into the middle of next year, when the price per gallon is forecast to average $3.41.
Diesel prices are forecast to increase in the second half of 2026, but will remain more than 20 cents below the average price at the end of this year.
The full outlook is available on the EIA website.
Full #STEO report here ➡️ https://t.co/omAfuxyJUU
Highlights here ➡️ https://t.co/3FQQ0IMICn
— EIA (@EIAgov) December 9, 2025
A new forecast system
As part of its December release, EIA announced plans to change to its short-term energy outlook model.
According to EIA, the current model was built “a quarter-century ago.”
The modernization will be completed in stages. A new upstream model will be introduced in the spring. The full update is expected in 2027, EIA said.
A modern data architecture with automated data flows, internal visualization tools and comprehensive documentation is a feature of the new system.
“EIA is decisively accelerating toward a more integrated and timely forecasting system that better reflects the evolving role of the United States in global energy markets,” said EIA Administrator Tristan Abbey. LL
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