Diverging Forecasts: EIA and Macquarie Clash on 2026 Energy Prices

As we approach 2026, the energy market is facing a pivotal moment characterized by diverging forecasts from two influential entities: the U.S. Energy Information Administration (EIA) and Macquarie Group. Both organizations acknowledge the emergence of substantial global oil and gas surpluses; however, their projections for future prices reveal stark contrasts that reflect the complexities of the current supply-demand dynamics.

EIA’s Outlook: Anticipating Oversupply and Price Declines

In its November Short-Term Energy Outlook, the EIA predicts a sustained decline in crude oil prices as global inventories continue to swell. The agency forecasts that Brent crude will average $69 per barrel in 2025, dropping further to $55 per barrel in 2026. This outlook is underpinned by expectations of robust supply growth outpacing demand, particularly as U.S. crude production is projected to hold steady at a record 13.6 million barrels per day through 2026.

The EIA's analysis suggests that a structural oversupply will exert downward pressure on prices well into next year, complicating the landscape for producers and stakeholders. The agency highlights that increasing production from both OPEC and non-OPEC sources will contribute to this trend. With inventories rising and demand growth struggling to keep pace, the EIA’s projections signal a challenging environment for oil and gas market participants.

Macquarie’s Perspective: A More Nuanced Price Pathway

Conversely, Macquarie Group’s quarterly Commodities Compendium offers a more nuanced view of the energy market. While acknowledging the oversupply, Macquarie anticipates a more complex trajectory for prices. Their forecast suggests that West Texas Intermediate (WTI) will average $65 per barrel in 2025 and $57 per barrel in 2026—slightly above the EIA’s estimates.

Macquarie analysts point to visible stock builds, a rise in oil-on-water, and strengthening non-OPEC supply as factors that will pressure prices in the near term. However, they also stress that geopolitical events, including sanctions on Russia, uncertainties surrounding Venezuela, and unpredictable U.S. winter weather, could create volatility in the market. The firm anticipates that these geopolitical risks may lead to price fluctuations that the EIA’s more linear forecast does not fully account for.

Common Ground: The Challenge of Oversupply

Despite their differences, both the EIA and Macquarie agree on the significant global surpluses forming within the market. Macquarie has highlighted a notable increase in oil-on-water stock levels, estimating an accumulation of 130 to 230 million barrels since late summer. This increase suggests early signs of oversupply, which could compel OPEC+ to reconsider its current production strategy.

The expectation is that OPEC+ may need to implement production cuts in the second half of 2026 to stabilize the market and prevent prices from declining further. This potential pivot underscores the importance of OPEC’s role as a stabilizing force in the energy market, especially during periods of excess supply.

Divergence in Natural Gas Forecasts

The forecasts for natural gas prices reveal a similar divergence between the two organizations. The EIA anticipates that Henry Hub prices will gradually increase, projecting averages of $3.50 per million British thermal units (MMBtu) in 2025 and $4.00 per MMBtu in 2026. This expected rise is driven by increasing winter demand and an expanding liquefied natural gas (LNG) export market, which is crucial for meeting international demand.

In contrast, Macquarie has revised its gas outlook higher but remains cautious, suggesting that U.S. production may surprise on the upside, thereby maintaining adequate storage levels. This perspective highlights the ongoing evolution of the U.S. gas market, where production capabilities continue to enhance overall supply resilience.

Implications for Market Participants

The contrasting forecasts from the EIA and Macquarie reflect an energy market in transition. With supply appearing resilient amid fluctuating demand, stakeholders must navigate a landscape shaped by OPEC+ decisions and geopolitical pressures. The increasing likelihood of oversupply presents both challenges and opportunities for operators, manufacturers, and service companies involved in the OCTG sector.

Producers may need to reassess their pricing strategies and operational efficiencies to mitigate the effects of potential price declines. For OCTG manufacturers, understanding these market dynamics is crucial for aligning production levels with anticipated demand, particularly as operators may adjust their drilling and completion activities in response to price fluctuations. Furthermore, the need for strategic partnerships and innovation will be vital in enhancing competitiveness and ensuring long-term sustainability in this volatile environment.

Outlook: Preparing for 2026

Looking ahead, the energy market is poised for continued volatility as it grapples with the implications of these diverging forecasts. The interplay between supply growth, OPEC+ actions, and geopolitical events will be critical in shaping the trajectory of oil and gas prices through 2026. Stakeholders must remain agile and informed, prepared to adapt to changing market conditions as they emerge.

As industry professionals consider their strategic options, the ability to anticipate market shifts and respond effectively will be paramount. The key to navigating this complex landscape lies in leveraging data insights, fostering innovation, and maintaining flexibility in operations. As the energy sector prepares for 2026, the focus will undoubtedly be on finding balance amid uncertainty and positioning for future growth in a rapidly evolving environment.