EIA: Global oil inventories will continue to increase through 2026, 2027
Global oil inventories will continue to increase through 2026 and 2027, albeit at a more gradual rate in 2027, the US Energy Information Administration (EIA) predicted in its January 2026 Short-Term Energy Outlook (STEO). Brent crude oil prices are forecast to average $56/bbl in 2026 and $54/bbl in 2027, compared with an average of $69/bbl in 2025.
Global crude oil prices declined through the second-half 2025, with the Brent crude oil spot price averaging $63/bbl in December, about $11 lower than in December 2024. Prices were flat or fell in every month during second-half 2025 as growing crude oil production and increasing volumes of oil in floating storage outweighed the effects of potential export disruptions linked to tensions in Russia and Venezuela.
In the outlook, EIA expects global production of liquid fuels will increase by 1.4 million b/d in 2026 and 0.5 million b/d in 2027. Global liquid fuels production growth in 2026 is driven by crude oil production growth in OPEC+, while production growth in 2027 is driven by countries outside of OPEC+, primarily in South America. EIA’s forecast assumes existing sanctions on Venezuela remain in place through 2027.
Global liquid fuels consumption increased by an estimated 1.2 million b/d in 2025 and is forecast to increase by 1.1 million b/d in 2026 and 1.3 million b/d in 2027. EIA noted that consumption growth rises in 2027 as global economic activity picks up pace. According to forecasts from Oxford Economics, global GDP will grow by 3.1% this year and 3.3% in 2027.
US crude oil production
Following an annual peak of 13.6 million b/d in 2025, EIA predicts that US crude oil production will again average about 13.6 million b/d this year. However, in 2027, EIA anticipates a decline in production to 13.3 million b/d, reflecting a 2% decrease from the 2026 forecast.
According to EIA, with sustained lower crude oil prices, US crude oil production will decrease as the slowdown in drilling activity will outpace increases in drilling productivity. The West Texas Intermediate (WTI) price averages $52/bbl in 2026 and $50/bbl in 2027 in EIA’s forecast, down from $65/bbl in 2025.
US natural gas prices
On an annual basis, US natural gas prices are relatively flat in 2026 before rising in 2027 as market conditions tighten. EIA expects the Henry Hub natural gas spot price will average just under $3.50/MMbtu this year, a 2% decrease from 2025, and then rise by 33% in 2027 to an annual average of almost $4.60/MMbtu.
According to EIA, the substantial increase in Henry Hub spot price in 2027 is due to demand growth outpacing supply growth. Factors such as the expansion of US LNG export capacity and increased natural gas consumption in the electric power sector are expected to drive stronger demand, pushing storage inventories below the 5-year average and posting upward pressure on prices.