EIA Cuts 2026, 2027 USA Gasoline Price Projection
The U.S. Energy Information Administration (EIA) lowered its U.S. regular gasoline price projection for both 2026 and 2027 in its latest short term energy outlook (STEO).
According to its latest STEO, which was released on July 7 and completed its forecast on July 1, the EIA now sees the U.S. regular gasoline price averaging $3.64 per gallon this year and $3.09 per gallon next year. In its previous STEO, which was released in June, the EIA saw the U.S. regular gasoline price averaging $3.90 per gallon this year and $3.64 per gallon next year.
A quarterly breakdown included in its latest STEO revealed that the EIA sees the fuel price averaging $3.80 per gallon in the third quarter, $3.39 per gallon in the fourth quarter, $3.13 per gallon in the first quarter of next year, $3.21 per gallon in the second quarter, $3.12 per gallon in the third quarter of 2027, and $2.92 per gallon in the fourth quarter.
In its June STEO, the EIA projected that the U.S. regular gasoline price would average $4.26 per gallon in the third quarter, $3.82 per gallon in the fourth quarter, $3.65 per gallon in the first quarter of 2027, $3.82 per gallon in the second quarter, $3.69 per gallon in the third quarter of next year, and $3.41 per gallon in the fourth quarter of 2027.
“We expect lower crude oil prices will contribute to retail gasoline prices falling by about 41 cents per gallon in the third quarter (3Q26) compared with 2Q26 and averaging just under $3.80 per gallon,” the EIA said in its latest STEO, which projected that Brent and WTI spot average prices will come in at $81.91 and $76.26 per barrel this year, respectively.
In its previous STEO, the EIA saw Brent and WTI spot prices averaging $95.39 and $88.32 per barrel in 2026, respectively.
“A decrease in crude oil prices contributes to a decrease of almost 50 cents per gallon in quarter on quarter gasoline prices,” the EIA said in its latest STEO.
“However, this decrease is offset by increases in the wholesale and retail gasoline margins,” the EIA warned.
“Ongoing tightness in gasoline inventories will support the crack spread for gasoline - the difference between the wholesale price and the crude oil price - as we expect the wholesale price of gasoline will not fall as quickly as the price of crude oil,” it added.
The EIA revealed in its July STEO that it estimates the gasoline crack spread will increase about 10 cents per gallon on average in the third quarter of this year.
“We expect a similar increase in U.S. average regional retail and distribution margins - calculated as the difference between the retail and wholesale prices,” the EIA said in its latest STEO.
“Differences in the retail margin are likely to vary by region, depending on regional inventory levels and the relative access to imports or domestic transfers,” it highlighted.
“Retail prices historically decrease more slowly than crude oil prices due to the more decentralized nature of retail markets, as well as ongoing uncertainty and the heightened risk environment of the global petroleum market,” it added.
“We expect competitive pressure will contribute to significantly narrower crack spreads in 4Q26 as inventories restock and the summer demand season comes to an end, bringing 4Q26 retail prices down to around $3.40 per gallon,” it continued.
“We expect stable gasoline inventories, lower crude oil prices, and lower crack spreads to contribute to lower prices next year, with 2027 retail gasoline prices falling to an average close to $3.10 per gallon,” it went on to state.
Gasoline Inventories
The EIA highlighted in its July STEO that, in April and May, gasoline inventories fell below the five-year (2021-2025) range “as a result of lower gasoline production, fewer gasoline imports, and more gasoline exports”.
“Refiners worked to maximize jet fuel production and maintain distillate production in response to high global demand,” the EIA pointed out in the STEO.
“Net imports of gasoline also declined as U.S. exports out of the Gulf Coast rose sharply and imports into the East Coast from the Atlantic Basin fell after becoming more expensive,” it added.
“We expect both increased production and increased net imports to contribute to greater availability of gasoline supplies, helping to stabilize inventories by the fourth quarter of this year, before reaching five-year averages early in 2027,” it said.
“In our forecast, this stabilization of inventory is enabled by refiners increasing gasoline yields in the second half of 2026 (2H26) and by greater gasoline supply from global markets,” it continued.
In its July STEO, the EIA revealed that it expects U.S. gasoline consumption in the second half of the year “to remain below the five-year average and fall below the five-year low during some months, as a result of higher gasoline prices and economic conditions”.
“Relatively low consumption amid higher production and imports will all support growth in gasoline inventories through the end of the year,” it said.
Recent Price Trajectory
The EIA’s latest gasoline fuel update, which was released on July 7, shows a declining price trend for U.S. regular gasoline.
According to this update, the average price of U.S. regular gasoline came in at $3.914 per gallon on June 22, $3.831 per gallon on June 29, and $3.777 per gallon on July 6. Although the update showed a recent declining price trend for gasoline, it outlined that the July 6 price was $0.288 higher than the price two years ago and $0.652 higher than the year ago price.
Of the five Petroleum Administration for Defense District (PADD) regions highlighted in the EIA’s latest fuel update, the West Coast was shown to have the highest U.S regular gasoline fuel price as of July 6, at $4.831 per gallon. The Gulf Coast was shown in the update to have the lowest gasoline price as of July 6, at $3.343 per gallon.
A glossary section of the EIA site notes that the 50 U.S. states and the District of Columbia are divided into five districts, with PADD 1 further split into three subdistricts. PADDs 6 and 7 encompass U.S. territories, the site adds.
Current Price
According to the AAA Fuel Prices website, the average price of regular gasoline in the U.S. is $3.8840 per gallon, as of July 10. Yesterday’s average was $3.8460 per gallon, the week ago average was $3.8230 per gallon, the month ago average was $4.1510 per gallon, and the year ago average was $3.1720 per gallon, the site showed.
The highest recorded average price for regular gasoline was seen on June 14, 2022, at $5.0160 per gallon, the AAA Fuel Prices site outlined.
GasBuddy’s live ticking average for regular gasoline in the U.S. was $3.856 per gallon as of 7.05am EST on July 10. The figure was 0.3 cents higher than yesterday’s average, 8.9 cents higher than last week’s average, 25.6 cents lower than last month’s average, and 68.9 cents higher than last year’s average, GasBuddy’s website highlighted.
To contact the author, email andreas.exarheas@rigzone.com
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