Could Oil Dip Below $50 A Barrel Next Year?

The Energy Information Administration (EIA) issued what can only be described as a shocking adjustment to oil forecasts for next year.

In short, it added a sharp increase in inventories in both U.S. domestic and international markets. The result of which is a sharp drop in oil price predictions for early next year.  West Texas Intermediate (WTI) prices could pierce the $50 per barrel threshold in 2026 based on current conditions. Total production is expected to ease as a result – that will be something for ASA members to monitor (as inventories in storage rise). Despite lower input prices for oil, diesel will remain rangebound (due to limits on refinery capacity) while gasoline prices fall sharply lower. 
 

WTI was moderately lower month-over-month at the time of writing. Oil was trading at $63.34 ($69.19 a barrel in last month’s report), which is now 7.9% lower year-to-date.  It was 11.03% lower vs. this time last year (2.7% lower than last month). Brent North Sea Crude was also moderately lower at $67.26 ($72.51 a barrel last month). This was down 7.06% YTD and was 9.39% lower over the past 12 months. 
 

Fuel prices were relatively unchanged this month. Diesel prices were essentially unchanged at $3.70 a gallon at the time of writing ($3.73 a gallon in the last briefing) (Source: AAA) and were less than $.01 per gallon lower than last year.

Gasoline was also relatively unchanged at $3.18 a gallon ($3.14 per gallon in last month’s briefing), which is 17 cents per gallon lower than last year (36 cents lower last month).
 

The biggest change this month (and almost shocking) is coming out of the EIA forecast for 2026 crude oil prices, and they were shifted downward in the latest short-term forecast. Prices are expected to average $63.58 in 2025 ($65.22 in the last update).  For 2026, the EIA has adjusted the forecast sharply downward, showing oil prices falling to $47.77 ($54.82 a barrel in the last forecast).

Prices are expected to average $64.20 in Q3, $54.05 in Q4 and $45.97 in Q1 of next year. As mentioned, if oil prices do break the $50 per barrel threshold, that will put pressure back on producers as many fall below critical breakeven levels. 
 

Gasoline prices were relatively unchanged once again in the latest July forecast and are expected to average $3.07 in 2025 (versus $3.09 last month and a $3.31 average in 2024).

But the new forecast has them going much lower in 2026, falling to $2.88 per gallon ($3.04 last month). Prices will average $3.11 in Q3, $2.99 in Q4, and $2.93 in Q1 of 2026. Diesel prices as reported by the EIA currently show them slightly higher at $3.61 ($3.52 in the last update) through 2025 (after averaging $3.76 in 2024). Prices are expected to average $3.67 in Q3, $3.59 in Q4, and $3.59 in Q1 of 2026.
 

• The EIA expects daily crude oil production to be slightly higher at 13.41 million barrels per day in 2025 (13.37 in the last update) but now show a mild pullback at 13.28 mbpd in 2026 (13.37 in the last update). Total commercial inventories (all types of crude oil and fuels) are now expected to surge to an average 1.248 billion barrels in 2025 (1.204 in last month’s report and 1.229 billion in 2024).  In a complete reversal, the EIA now has them rising sharply to an average of 1.261 million barrels in 2026 (up from 1.185 billion barrels in the last forecast).

What ASA Members Are Saying
 

Thoughts from ASA members on current industrial-mechanical PVF market conditions.
 

From An ASA PVF Distributor
 

• Sales: Sales are up (43 percent). Attributed to growth in the data center market. Also involved in two large hospital projects, funds cleared for a new prison in town and multiple data centers across North America. Also, the emergence of district energy and power.
• Concerns: Labor shortages, product demand, pace of construction.
• Forecasting: As optimistic as we have been through August of this year and going into 2026.

More ASA Member Comments
 

• “PVF business has been steady. Copper tube decreases and Viega increases have led to the copper market being VERY active.  The industrial PVF sector for us has been steady but not gang busters.”
• “YTD revenue remains up a solid  +7% on the same period in 2024 and our YTD GP is actually up 9%.”
• “The only area that is a possible cautionary flag is our booked orders which are down 9.5% MTD in August.”
• “Our sales are slightly up and we expect to run ahead of last year the rest of the year. Multi-family is heating up.”

Carbon Steel Update
 

Carbon steel hot-rolled coil (HRC) is trading just over 5%, down from the same period last month: $827 current vs $873 last month. Carbon steel pipe’s decline has been much slimmer, as has been customary during this decent that started in March. Pipe prices are flat to down 1-2% across various product groups.

We are generally past the summer, heat-induced decline in production, so mills are likely to be operating at higher capacity, if desired.  Lead times have been consistent over the last three months. 

Stainless Fitting Update

There has not been much change in the stainless fitting market pricing as tariffs have stayed firm. Expectations were for trade deals to relieve the duties, but the administration is holding in their efforts to promote domestic steel production. Projects are moving ahead on data centers and LNG facilities. Power should go lock step with every data center but is still lagging. 

Cast-Iron Update

McWane (Tyler Pipe) and Charlotte Pipe and Foundry have announced new 2026 list price sheets for cast-iron pipe & fittings that will represent an approximate 5% list price increase for all cast iron pipe & fittings. Both companies will be taking allocated orders from the current list price sheet through the end of November 2025. Tyler and Charlotte Pipe are asking that you contact your local sales representative to help address any questions or specific details you may have. 

Carbon Steel Weld Fittings and Flanges Update

Demand for carbon steel weld fittings & flanges has slowed in August which has caused some price deflation while landed costs are rising due to receiving in containers that have the additional Section 232 tariff applied. This may cause future price adjustments.