EIA lifts its 2027 diesel forecast 12% to $5.03 a gallon, even as it expects prices to fall

The U.S. Energy Information Administration raised its forecast for 2027 fuel prices in its November Short-Term Energy Outlook, released November 10. It now expects retail diesel to average $5.03 a gallon next year, up from $4.49 in the October outlook, a 12% change. Regular gasoline is forecast at $3.73, up 4.7% from $3.56. Fox Business also reported the revision.

The headline reads like a warning, but the direction is still down. The EIA's own weekly survey put on-highway diesel at $6.127 a gallon on November 9, 16.5 cents lower than a week earlier but $2.29 more than a year ago ($3.837 then, by subtraction). Regular gasoline was $3.995, down 15.8 cents on the week. Against those prints, the 2027 averages imply diesel about 18% lower and gasoline about 7% lower. What changed is how far the EIA thinks prices will fall, not whether they will.

Why the forecast moved up

The EIA says it now assumes global petroleum product markets stay supply-constrained through the end of 2027. That keeps refining margins (crack spreads) wider next year and keeps U.S. refineries running hard. It expects Brent crude to stay near $100 a barrel for the rest of this year, then slide to an average of $77 in the fourth quarter of 2027 as depleted inventories rebuild, and it assumes most Middle East production outside Iran returns to pre-conflict averages by mid-2027. U.S. commercial crude stocks ended October at 410 million barrels, the lowest end-of-October level since 2014, the EIA said.

Two caveats matter. The forecast was completed on November 5 and, in the EIA's words, does not account for market events after that day. And the 2026 diesel average is $5.25, only 1.2% above last month's, so almost all of the revision is in next year.

Source: EIA Short-Term Energy Outlook (Nov. 10) and EIA Gasoline and Diesel Fuel Update (Nov. 9 prices).

Who it actually hits

The arithmetic below is ours, on assumptions we chose, not an EIA estimate. Take a regional hauler whose tractor burns 20,000 gallons of diesel a year.

• At the November 9 price of $6.127: 20,000 x $6.127 = $122,540.
• At the new 2027 forecast of $5.03: $100,600, or $21,940 less.
• At October's 2027 forecast of $4.49: $89,800. A budget built on that number is $10,800 per truck short against the new forecast ($100,600 minus $89,800).

For a landscaper or HVAC contractor running six vans at 1,200 gallons of gasoline each, the same revision is smaller but real: at $3.73 against $3.56, that is about $204 a van, or about $1,224 across the six, over a year. A moving company or delivery firm with a few box trucks sits between the two. The trades also differ in who absorbs it: a trucking company with a fuel surcharge clause passes most of it on, while a contractor with a fixed-price bid signed in the spring does not.

The independent trucking industry is large and thin-margined. CheckThisBiz holds 24,679 independent trucking listings, 44,163 in landscaping and 42,966 in moving, all of them fuel buyers. Our trucking playbook covers surcharges and cash flow.

What to do with it

1. Rebuild next year's fuel line from $5.03 diesel and $3.73 gasoline, and run a stress case at today's $6.13 and $4.00. Do not budget off the cheapest scenario.
2. Check every contract for a fuel adjustment clause. If a 2027 bid is fixed-price, price it off the new forecast, not off what the pump showed in a good month.
3. Do not read the forecast as a reason to prepay or lock fuel. It is a government projection built on assumptions about Middle East supply, and it can be revised again on December 8, the next release date.

What we are watching

The next EIA weekly pump survey is November 17, and the next Short-Term Energy Outlook is December 8. Both will show whether the descent from $6.13 is real or stalls. Our crude oil chart and markets board track the inputs. Earlier coverage: gas falls below $4.

Sources: U.S. Energy Information Administration (Short-Term Energy Outlook, Gasoline and Diesel Fuel Update); Fox Business; business counts from CheckThisBiz. This is market information, not investment advice.