EIA Forecast Signals Mixed Energy Cost Outlook Ahead

Fuel costs ease over the long term, but fertilizer energy remains volatile.

energy pkg.jpg

Market Day Report

NASHVILLE, TENN. (RFD NEWS)Energy markets are sending conflicting signals to agriculture, with lower long-term fuel prices but continued short-term volatility in heating and fertilizer inputs.

The U.S. Energy Information Administration’s February Short-Term Energy Outlook (PDF Version) projects Brent crude oil averaging about $58 per barrel in 2026 and $53 in 2027 as global production continues to outpace demand and inventories build. Despite recent geopolitical disruptions, expanding output worldwide is expected to keep diesel and fuel costs generally softer over time.

Natural gas tells a different story in the near term. The Henry Hub price averaged $7.72 per MMBtu in January after winter weather tightened supplies. Storage levels are now projected to end winter about 8 percent lower than previously expected. Prices should moderate later as drilling increases, with averages near $4.30 this year and $4.40 in 2027.

U.S. natural gas production is forecast to grow 2 percent in 2026, while rising solar generation and modest coal use help meet expanding electricity demand from industry and data centers.

Lower propane prices are also expected as higher gas production boosts supply.

Related Stories
Weak crop margins and tariff uncertainty are delaying machinery purchases and signaling slower capital investment across U.S. agriculture.
Corn demand is rising thanks to ethanol expansion, yet year-round E15 remains missing from the Farm Bill—leaving farmers questioning the policy gap.
Real Ag’s Shaun Haney explains how farmers are approaching risk management and the steps they’re taking to strengthen profitability through better financial planning.
ASFMRA’s George Baird shares insight on spring planting progress, acreage trends, and the financial factors influencing Mid-South farmers this season.
Heavy cattle weights are cushioning beef supplies despite shrinking herd numbers.
Strong cattle markets are masking ongoing financial stress across crop agriculture.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

Liquidity management and cost control will matter most in 2026.
Food demand is stable but price-sensitive across rural markets. For agriculture and rural communities, the important signal is not optimism — it is stability.
Stable blending demand continues to underpin corn use despite export volatility.
USDA headquarters downsizing reflects cost pressures and may reshape agency operations.
USDA Farmer Bridge Assistance payments could begin this weekend as producers face tight margins, shifting acreage expectations, cattle herd contraction, and growing pressure for a stronger farm safety net.
Delays on year-round E15 keep potential corn demand and fuel savings in limbo.