EIA raises U.S. diesel price forecast for 2027 due to tight global supply
The U.S. Energy Information Administration (EIA) raised its retail diesel price forecasts for both 2026 and 2027, citing declining domestic inventories driven by a globally tight distillate market. In the September Short-Term Energy Outlook, EIA projected an average of $4.40 per gallon in 2027 — up from its previous estimate of $4.07 — with a similar increase for 2026 to $5.07 per gallon. The agency attributed falling U.S. distillate fuel oil inventories, expected to dip below 100 million barrels this September and remain low through much of 2027, to supply losses from the Middle East, Russia, and China as well as high U.S. exports. EIA also warned that seasonal refinery maintenance in autumn could exacerbate inventory shortages during peak demand periods for heating oil in the Northeast. The agency noted ongoing disruptions in Middle Eastern crude production due to conflict, with an estimated 6.7 million barrels per day of shut-ins reported in August — up from July levels. While EIA expects most production to return by early 2027, some producers may remain below pre-conflict output through the end of its forecast period.
