September 9, 2026 - The U.S. Energy Information Administration (EIA) expects U.S. electricity generation will grow 2.2% to a record 4,368 billion kilowatthours (BkWh) this year. EIA expects an additional 1.7% growth in electricity generation next year.

Electricity generation is rising to meet additional demand, which is particularly strong in the West South Central region, from data center development and increased manufacturing activity in the commercial and industrial sectors.

Other key takeaways from the September STEO are below.

Global oil market assumptions. EIA forecasts oil production in the Middle East to increase in the coming months as flows through the Strait of Hormuz gradually increase and alternative export routes are used. EIA expects constraints on traffic through the strait will continue through the fourth quarter of 2026 (4Q26), leaving an average of 5.7 million barrels per day (b/d) of crude oil production shut in during the quarter. Most Middle East crude oil production will likely return to near pre-conflict averages by 2Q27, although output from some producers may remain low through the forecast period.

Global oil prices. Global oil prices rose in August, with the Brent crude oil spot price averaging $91 per barrel (b), $7/b higher than in July. Prices remain high due to falling global inventories. EIA estimates global inventories have decreased by about 400 million barrels so far this year and expects inventories to continue declining through the end of 2026. EIA forecasts Brent to average around $90/b in 2H26 before declining to an average of $74/b in 2027 as oil production recovers and inventories rebuild.

U.S. distillate inventories. EIA expects inventories of U.S. distillate fuel oil—often sold as diesel—to fall below 100 million barrels in October for the first time since 2003 and remain below the five-year (2021–2025) low through the first quarter of next year. EIA forecasts U.S. retail diesel prices to average $5.55 per gallon (gal) in 4Q26 and $4.40/gal in 2027.

Natural gas storage. EIA expects U.S. natural gas inventories will total 3,969 billion cubic feet (Bcf) at the end of October, 5% above the five-year average and 1% above October 2025 levels. Strong natural gas production is supporting higher inventories, with the Permian and Haynesville regions accounting for about 70% of forecast U.S. natural gas production growth in both 2026 and 2027.

Electricity demand. EIA expects U.S. electricity sales to total 4,135 billion kilowatthours (BkWh) in 2026, an increase of almost 2% from 2025, and to rise another 2% to 4,211 BkWh in 2027. Data center development and increased manufacturing activity are driving growth in the commercial and industrial sectors. Despite a pause in new data center projects in Texas, the West South Central region remains the largest regional contributor to electricity sales growth in EIA’s forecast.

The full September 2026 Short-Term Energy Outlook is available here.