Europe Asia News

EIA’s forecasts — from the Department of Energy’s independent statistical arm — are welcome news for the Trump administration, which is grappling with growing concerns about the U.S. economy. Oil prices have steadily declined since hitting $80 a barrel at the start of the year, bringing relief at the pump. The U.S. benchmark was near $62 a barrel on Tuesday.

The EIA projected the average price of regular gasoline at $3.10 per gallon this year, 20 cents lower than a year earlier. It added that the decline is likely to continue, with prices averaging $2.90 per gallon in 2026.

The report said, “With falling gasoline prices, U.S. drivers’ spending on gasoline as a share of personal income is likely to be at the lowest level since at least 2005,” excluding the pandemic-affected year of 2020. “We estimate that this year spending will drop below an average of 2% of disposable income, down from the prior decade’s average of 2.4%.”

Prices fell as OPEC and its ally Russia increased their own oil output. This OPEC+ supply boost slowed U.S. oil-production growth, while output reached a record 13.58 million barrels per day in June, surpassing the previous peak set in October.

Rory Johnston, a market analyst at Commodity Context, said oil and gasoline prices could fall further as China has halted purchases to refill its strategic reserves and offshore storage.

“Crude won’t truly start to fall until Chinese buying and the build-up of oil on the water end,” Johnston wrote in a note. “However, predicting the exact timing — given already uncertain Chinese policy pressure — is, at best, speculative.”