Energy agency updates gasoline price forecast for 2027

The Energy Information Administration (EIA), an independent agency within the Energy Department, recently revised its short-term energy outlook. The report indicates that supplies of gasoline and diesel are likely to remain limited through the end of 2027.

The EIA’s latest report estimates the average retail gasoline price will reach $3.73 per gallon in 2027, a decrease from the $3.89 per gallon seen this year. However, this represents a 5% increase from the agency’s previous forecast last month, which predicted $3.56 per gallon nationally in 2027.

The updated forecast for diesel anticipates retail prices at $5.03 a gallon in 2027, up from a prior estimate of $4.49 a gallon. This would still be below the $5.25 a gallon consumers faced in 2026.

According to the EIA, “We now assume global petroleum markets will face continued supply constraints through the end of 2027. These market conditions will support wider petroleum crack spreads next year and incentivize elevated U.S. refinery operations.”

Global crude oil prices have risen for the third consecutive month as of October, influenced by factors including declining inventories, attacks on oil tankers in the Persian Gulf, shipping limitations, and increased transportation expenses. The EIA anticipates most Middle Eastern production, excluding Iran, will return to pre-conflict levels by mid-2027.

While Brent crude oil prices are expected to remain around $100 per barrel for the remainder of 2026, the EIA forecasts a gradual decline to an average of $77 per barrel in the fourth quarter of 2027.

Gasoline prices recently dipped below $4 a gallon this week, marking the first time since July. The national average price currently stands at $3.94 a gallon, a decrease of approximately 18 cents from last week and 41 cents from a month ago.