EIA Forecasts High Oil Prices Through End of 2026

Editor’s Note: A version of this news first appeared in the Energy Information Administration’s (EIA) Short-Term Energy Outlook.

The EIA forecasts oil production in the Middle East will rise in the coming months because of gradually increasing flows through the Strait of Hormuz and the use of alternative routes out of the region, according to its September 2026 Short-Term Energy Outlook (STEO). However, the EIA assumes some constraints to exporting oil from the Middle East will persist through the end of the year, which keeps crude oil production in the region below pre-conflict averages until the second quarter of 2027. Global oil prices rose to an average of $91 per barrel (bbl) in August, $7/bbl higher than in July. Prices remain elevated in response to falling global oil inventories, which the EIA estimates have decreased by 400 million barrels so far this year. The EIA expects inventories will continue falling through the end of 2026, which will keep prices near the August monthly average in the coming months. The organization now forecasts the Brent crude oil spot price to average around $90/bbl in 2H26. As oil production rises into next year, and as inventories rebuild, the EIA expects the Brent spot price to gradually fall to an average of $74/bbl in 2027. The EIA forecasts U.S. distillate fuel oil inventories will drop below 100 million barrels in September and will remain below the five-year (2021–2025) low through much of 2027. Tightness in the global distillate market has raised domestic prices and incentivized U.S. exporters to increase distillate exports. The EIA assumes global production of distillate fuel will remain below last year’s levels in the coming months, contributing to low U.S. diesel inventories and high diesel prices. U.S. natural gas inventories are on track to be above the five-year average at the start of winter. The EIA forecasts natural gas inventories will total 3,969 billion cubic feet on Oct. 31 — the end of the injection season — 5% above the five-year average. Rising natural gas production in the Permian and Haynesville regions has supported inventory builds over the summer. The United States uses record amounts of electricity in the EIA’s forecast. The organization expects electricity sales in the United States to total 4,135 billion kilowatthours (BkWh) in 2026 and 4,211 BkWh in 2027, driven by data center development and increased manufacturing activity in the commercial and industrial sectors. Despite a pause in connecting new data center projects in Texas to the grid, the West South Central region accounts for the largest share of total electricity sales growth in the forecast. The EIA finalized inputs into the model on Sept. 3. This forecast does not specifically account for market events after that day.

New York Judge Blocks State’s Climate Change Superfund Act

The U.S. District Court for the Northern District of New York struck down the state’s Climate Change Superfund Act, ruling that New York may not impose strict liability on energy companies for their alleged contributions to global greenhouse gas emissions. The Climate Change Superfund Act, which New York enacted in 2024, purported to impose billions of dollars on domestic and foreign energy companies that extract fossil fuels or refine crude oil. A coalition of states and trade organizations sued, alleging the act is preempted by the federal Clean Air Act and by the federal foreign affairs power, and that the act violates the Constitution. After the case was consolidated with a suit filed by a different coalition of trade organizations, the Justice Department filed a statement of interest and presented oral argument in support of the plaintiffs. The court agreed that the New York Climate Change Superfund Act is preempted by the Clean Air Act and by the federal foreign affairs power, and the court held that the Climate Act is invalid. The government has also filed a complaint in the U.S. District Court for the Southern District of New York challenging the same Climate Change Superfund Act, as well as a complaint in the U.S. District Court for the District of Vermont challenging Vermont’s Climate Superfund Act, which seeks to recover an unspecified amount from the same energy companies targeted by the New York Act. In those suits, the government alleges that both acts are preempted by the federal Clean Air Act and by the federal foreign affairs power, and that they violate the U.S. Constitution.

Mid-Month to Mid-Month: Mid-September Down From August

During the latest mid-month period, prices at Mont Belvieu, Texas, increased. The posted prices increased 15.375 cents/gal from August mid-month to September mid-month, while the spot prices increased 15.875 cents. Conway, Kansas, postings increased 11.275 cents/gal, and spots increased 12.5 cents over the month. The Mont Belvieu mid-August posted price was 79.375 cents/gal. The next week the price increased 5.125 cents to 84.5 cents/gal, followed by a 4.5-cent decrease to 80 cents/gal. Postings increased 6.375 cents to 86.375 cents/gal the first week of September, followed by a 8.375-cent increase to 94.75 cents/gal at mid-month. Compared to the same time last year, the September 2026 prices were 16.27 cents higher. The Conway mid-August posted price was 68.685 cents/gal. The next week the price increased 4.625 cents to 73.31 cents/gal, followed by a 4.44-cent decrease to 68.87 cents/gal. Postings increased 5.655 cents to 74.525 cents/gal the first week of September, followed by a 5.435-cent increase to 79.96 cents/gal at mid-month. Compared to the same time last year, the September 2026 prices were 5.547 cents higher. Mont Belvieu spots opened mid-August at 68.125 cents/gal. The next week the price increased 5.875 cents to 74 cents/gal, followed by a 6.5-cent decrease to 67.5 cents/gal the next week. Spots increased 9.875 cents to 77.375 cents/gal the first week of September, followed by a 6.625-cent increase to 84 cents at mid-month. Compared to the same time last year, the September 2026 prices were 17 cents higher. Conway spots opened mid-August at 62.5 cents/gal. The next week the price increased 5.375 cents to 67.875 cents/gal, followed by a 5.375-cent decrease to 62.5 cents/gal the next week. Spots increased 7.75 cents to 70.25 cents/gal the first week of September, followed by a 4.75-cent increase to 75 cents/gal at mid-month. Compared to the same time last year, the September 2026 prices were 8 cents higher.

Colonial Group Acquires Foster Fuels

Foster Fuels Inc. announced that it has entered into an agreement to be acquired by Colonial Group Inc. Colonial is a Savannah, Georgia-based, family-owned and -operated, diversified family of companies that specialize in energy, chemical, logistics and transportation sectors. According to the company, Foster customers, employees and business partners can expect continuity of service through operations, services and relationships. Foster will continue to serve customers under the same brand and leadership. Foster and Colonial share a commitment to preserving what makes Foster successful, while providing additional resources and long-term investment to support future growth. This partnership positions Foster for continued growth, while strengthening its ability to serve customers throughout and beyond its current service areas. By joining Colonial, Foster will gain access to additional resources, expanded capabilities and long-term investment that support the company’s future. Also founded in 1921, Colonial was established with similar values and a similar mission to those that have guided Foster Fuels for more than a century. Foster believes the strong alignment between the two organizations’ cultures, leadership philosophies and commitment to customers made Colonial the right partner for the future. While the acquisition will expand the combined organization’s capabilities and geographic reach, leaders from both companies view the announcement as something far more significant than a business transaction. Foster and Colonial share a belief that businesses have a responsibility to strengthen the communities they serve. Foster’s longstanding tradition of community involvement, including the impact of the Foster Foundation, reflects values that closely align with Colonial’s own commitment to service and stewardship. The Foster Foundation will remain an independent organization, and both companies remain committed to supporting their communities. All Foster Fuels employees are expected to continue with the organization, and customers will continue working with the same team. Colonial is committed to supporting employees throughout the integration process while building upon expertise, relationships and customer focus. Together, the companies are committed to ensuring the values, relationships and service that defined their first century. Financial terms of the transaction were not disclosed.