The EIA Short Term Energy Outlook (STEO) was published recently, the estimate for World C+C output from October 2024 to December 2026 in the chart below is based on crude oil estimates in the STEO for World minus US C+C output and the trend in the ratio of the STEO crude estimates and C+C estimates from the EIA’s International Energy Statistics for World minus US C+C output from Jan 2018 to September 2024. For the next 5 charts the horizontal and vertical scales are the same, with 9 years on the horizontal axis and 16000 kb/d from the lowest to highest values on the vertical axis. The thin line represents monthly data or forecasts after September 2024 and the markers with labels show the average annual output for each year.
Last month’s estimate for average annual output in 2025 was 83467 kb/d using a similar methodology, so the STEO forecast has been revised lower for 2025, this STEO is the first to forecast through December 2026.
OPEC plus annual average output is expected to rise by about 1179 kb/d from 2024 to 2026, based on the STEO forecast which is an annual rate of increase of about 590 kb/d.
Non-OPEC plus nations minus US C+C output is expected to increase from 23723 kb/d in 2024 to 24716 kb/d in 2026, an annual rate of increase of about 496 kb/d, slightly less than the longer term annual trend from 2022 to 2026 of 517 kb/d.
US C+C annual average output is forecast to increase by 330 kb/d in 2025 and by only 79 kb/d in 2026, peak monthly output for this forecast is in November and December 2025 at 13730 kb/d. The reason for this expected decline from Dec 2025 to Dec 2026 will be explained later in the post.
In last week’s post Ovi made the interesting observation that much of the recent increase from non-OPEC+ nations could be attributed to just a few nations. In the chart above I leave out the US and focus on only Brazil, Canada, and Guyana. I use the all liquids forecast from the STEO and the trend in the ratio of C+C from the EIA International Statistics to the all liquids STEO estimates over the October 2018 to September 2024 period to make the estimate of C+C output from October 2024 to December 2026. The average annual output increases by 896 kb/d from 2024 to 2026, about 448 kb/d per year which is similar to the longer term average annual increase of 442 kb/d from Jan 2022 to December 2026. As the non-OPEC+ minus US C+C rate of annual increase was about 517 kb/d over the 2022 to 2026 period, these three nations comprise about 85% of the C+C increase for non-OPEC+ minus US.
The two charts above have units of kb/d on the vertical axis and offer two different views of these groupings of nations. Most of the increase in output over the Oct 2024 to Dec 2026 period comes from OPEC+ and Brazil, Canada, and Guyana with a small contribution from the US from October 2024 to October 2025.
Note the big drop in oil prices forecast for 2026, this is the reason the EIA expects US C+C output will fall in 2026, the low oil prices are expected to lead to fewer new wells completed in tight oil plays and slower overall growth in tight oil which is barely high enough to offset falling output elsewhere in the US. US annual average output rises marginally (80 kb/d) from 2025 to 2026.
Brent oil prices are expected to fall after 2025Q1.
Stocks are expected to build in 2025 and 2026 leading to a drop in oil prices.
OPEC+ crude oil production rises less than the OPEC+ announced targets in the EIA’s forecast. Note that this chart only includes OPEC+ members subject to quotas and excludes Mexico, Iran, Libya, and Venezuela. OPEC+ output increases by about 1.25 Mb/d from Nov 2024 to Dec 2026 in the EIA forecast.
Annual average consumption of liquid fuel increases by 1.3 Mb/d in 2025 and by 1.1 Mb/d in 2026 in the EIA forecast. This smaller increase is mostly due to lower growth of OECD demand in 2026 compared to 2025.
World liquids output growth is expected to be robust in 2025 and 2026.
OECD petroleum stocks remain near the bottom of the 2020-2024 average.
The Other regions of the US (not shale gas or tight oil plays) L48 onshore fall after October 2024, with the only region growing being the Permian Basin, but growth is barely enough to stem overall decline in 2026, US average annual C+C output grows by only 80 kb/d in 2026.
The chart above shows what is expected for US crude and product prices from 2023 to 2026.
The Permian continues to grow in 2026 slowly, but the rest of the US falls by a similar amount leading to overall flat annual average output (an increase of only 80 kb/d in 2026).
Natural gas prices are expected to rise to $3.10/ million BTU in 2025 and to $4/ million BTU in 2026. Higher prices lead to less natural gas used for power generation in 2026 and some decline in natural gas consumption. Exports of LNG are supported by ample supply with exports increasing from 12 BCF/d in 2024 to 16 BCF/d in 2026.
Growth in natural gas is forecast to be 1.5 BCF/d in 2025 and 3.1 BCF/d in 2026.
Consumption of natural gas is nearly flat in 2025 and falls in 2026 due to rising prices.
Total natural gas net exports (pipeline and LNG) rise from 12.7 BCF/d in 2024 to 18.6 BCF/d in 2026 a roughly 50% increase over 2 years.
I focus on the right side of the chart above because capacity of wind and solar are not really comparable to coal, natural gas, or nuclear due to their intermittency. The electricity generation on the right panel is more of an apples to apples comparison.
Consumption of electricity is expected to increase in 2025 and 2026.
US electricity consumption has been relatively flat from 2005 to 2019 so the recent trend of increasing electricity consumption is something new.
Residential electricity prices are expected to rise faster in 2026 due to higher natural gas prices. It is surprising that 2024 residential electricity prices rose so much with natural gas prices being quite low in 2024.