US EIA raises Q4 oil price forecast to USD 105 amid Middle East supply risks, diesel market tightness
New Delhi : The US Energy Information Administration (EIA) has raised its forecast for Brent crude oil prices for the fourth quarter of 2026 to an average of USD 105 per barrel, citing continued constraints on Middle East oil flows, attacks on energy infrastructure and tight diesel markets.
The US EIA raised the Q4 Brent forecast by USD 14 per barrel from the previous month’s outlook. The EIA said oil flows from the Middle East are expected to remain constrained through the fourth quarter, although regional shut-in production in September was the lowest since hostilities began.
The agency expects production and exports from the region to gradually increase as convoys through the Strait of Hormuz, bypass routes and increased ship-to-ship transfers help restore oil flows. However, it warned that attacks on the East-West pipeline in Saudi Arabia highlight the potential for continued volatility in physical oil supplies and crude prices.
The EIA also pointed to tightness in diesel markets as an additional source of upward pressure on crude oil prices, as refiners increase crude processing to meet demand for diesel.
Despite the near-term price pressure, the EIA expects the oil market to ease next year, forecasting Brent crude to average USD 84 per barrel in 2027.
US retail fuel prices also rose sharply in September. Average gasoline prices reached USD 4.35 per gallon, while diesel prices averaged USD 6.29 per gallon, driven by higher crude oil prices and rising refining margins. The EIA expects US diesel prices to average about USD 4.50 per gallon in 2027, while gasoline prices are projected to average just below USD 3.60 per gallon.
The outlook also highlighted persistent weakness in US distillate inventories. East Coast distillate inventories were 32 per cent below their five-year seasonal average in September and are expected to remain around 20 per cent below the 2021-2025 average through the upcoming winter.
Meanwhile, the EIA expects Henry Hub natural gas prices to average USD 3.16 per million British thermal units (MMBtu) in 2027, down 9 per cent from 2026. The decline is expected to be driven by higher-than-average inventories, supported by rising production that offsets increased liquefied natural gas exports.
The EIA said the forecast was finalised using market inputs available as of October 1 and does not incorporate developments announced after that date, including additional energy supplies following the G7’s October 2 announcement.
