US gas prices on Apr 29, 2026

Global oil demand is expected to exceed supply in early 2026. Both the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA) foresee a tighter global oil market throughout Q1 and Q2 2026, with demand generally surpassing available supply. For the first quarter of 2026, the IEA projects global oil demand at approximately 104.5 million barrels per day (mb/d), which would lead to a market deficit ^[3]. The EIA similarly estimates Q1 2026 global oil demand to be around 104.3 mb/d, against an anticipated supply of 104.0 mb/d, resulting in a 0.3 mb/d deficit ^[1]. Looking into the second quarter of 2026, the IEA forecasts demand rising to 105.1 mb/d, while the EIA projects demand at 104.9 mb/d, with both agencies anticipating the market to remain tight or in a marginal deficit ^[3].

OPEC+ actions will critically influence the future oil market balance. The spare production capacity of OPEC+ and its adherence to established production quotas are pivotal factors for the global oil market equilibrium. As of April 2026, OPEC+ is estimated to possess approximately 5 mb/d of spare capacity, which functions as a buffer against potential market volatility ^[2]. The Organization of the Petroleum Exporting Countries (OPEC) implemented production adjustments in April 2026, highlighting its active role in market management ^[4]. Should OPEC+ members maintain consistent compliance with these quotas, it would constrain global supply, potentially exacerbating the projected market deficits and leading to higher oil prices ^[3]. Conversely, if OPEC+ opts to deploy a substantial portion of its spare capacity or if compliance with quotas weakens, this could alleviate market tightness and contribute to a more balanced or even an oversupplied market ^[2]. Therefore, the decisions made by OPEC+ regarding its production levels and the utilization of its spare capacity will be instrumental in shaping the global oil market throughout Q1 and Q2 2026 ^[3].

In Spring 2026, US operable refinery capacity will decrease by Spring 2026. The total US operable refinery capacity is projected to be approximately 17.46 million barrels per calendar day (b/cd). This figure is derived from the U.S. operable atmospheric crude oil distillation capacity of 17.63 million b/cd at the beginning of 2025, which already reflected the permanent shutdown of LyondellBasell’s Houston refinery (60,000 b/cd) in February 2025 ^[1]. A further significant reduction will occur with the scheduled closure of Valero's Benicia refinery, which has a capacity of 170,000 bpd, by April 2026 ^[2]. This planned closure reduces the total capacity from 17.63 million b/cd to the projected 17.46 million b/cd, with no new refining developments expected to be operational by Spring 2026 ^[4].

The summer-blend gasoline transition will affect crack spreads regionally. The mandated transition from winter-grade to summer-blend gasoline is set to commence in April 2026, requiring refiners and pipelines to begin producing and distributing the new blend to ensure its availability by the May 1 retail deadline ^[3]. Summer-grade gasoline demands a lower Reid Vapor Pressure (RVP) to minimize evaporative emissions, making its production process more complex and consequently more expensive ^[5]. These increased production costs typically result in higher wholesale gasoline prices and can lead to wider crack spreads. Regional markets may experience these effects more acutely, especially those subject to stricter reformulated gasoline (RFG) requirements or highly dependent on specific refineries ^[5].

US gasoline demand faces significant reduction from EVs and mobility shifts. Globally, electric vehicles are projected to avoid the use of 2.3 million barrels of oil daily by 2025 ^[1]. Within the US, gasoline demand confronts a long-term structural problem with plunging per-capita consumption, indicating a fundamental shift in consumption habits that extends beyond merely electric vehicle adoption ^[2].

US crude oil production will plateau before a slight 2026 decrease. The U.S. Energy Information Administration (EIA) forecasts that US crude oil production will remain near 2025 record levels in the near term ^[4], though it anticipates a slight decrease in 2026 ^[3]. Concurrently, reports indicate a slowdown in US shale activity, leading to discussions on whether this represents a cyclical trough or a structural twilight for the industry ^[5].

Demand destruction and supply dynamics are rebalancing the energy market. These converging trends suggest that demand-side destruction is a substantial factor influencing market rebalancing alongside evolving supply-side dynamics. While a precise quantitative offset is not explicitly detailed, the structural decline in US gasoline consumption ^[2] coupled with the significant global oil avoidance from EVs ^[1] indicates a diminishing demand for oil products as US crude oil production is projected to plateau and then slightly decrease in 2026 ^[3], with slowing activity noted in shale basins ^[5].

The US Department of Energy (DOE) is steadily refilling the Strategic Petroleum Reserve (SPR) through 2025. This replenishment strategy involves a phased approach, with crude oil purchases planned to extend into 2025 ^[2]. The DOE targets an acquisition price of $79 per barrel or less to ensure value for taxpayers ^[1]. For instance, contracts awarded in December 2022 secured 3 million barrels for February 2023 delivery at an average price of $77.66 per barrel ^[1]. The comprehensive effort to fully restore the SPR is projected to cost an estimated $20 billion and will span several years ^[3].

Research does not indicate future SPR releases for price spikes or elections. The available research does not provide specific information regarding the likelihood of the current administration authorizing additional SPR releases in response to price spikes, particularly ahead of the 2026 midterm elections. While the SPR is designed to address severe energy supply disruptions, current sources do not contain direct statements from the administration on potential future releases in relation to election timing or general price fluctuations ^[4]. Discussions found concerning SPR releases in 2026 generally describe hypothetical scenarios that are unrelated to the current administration's actions or election-driven decisions ^[4].

WTI futures for mid-2026 are currently in deep contango. The WTI crude oil futures curve for May/June 2026 is presently characterized by deep contango, meaning that prices for future deliveries are higher than nearer-term contracts ^[2]. Specifically, the Crude Oil WTI Jun '26 futures (CLM26) have been quoted around $79.79 to $79.80 ^[1]. This market structure, where future prices are elevated, often signals long-term risks, potentially implying expectations of increased future supply or decreased future demand relative to current levels ^[2].

OPEC+ meetings in 2025 will significantly influence future oil prices. These crucial events can significantly influence the WTI futures curve due to their decisions on oil production levels ^[3]. Several key decision dates for OPEC+ meetings are scheduled for 2025, which could alter the long-term outlook, including the WTI May/June 2026 contracts. These important gatherings are set for March 18, 2025 (188th Meeting) ^[4], June 1, 2025 (189th Meeting) ^[3], and November 24, 2025 (190th Meeting) ^[5]. Policy adjustments made during these conferences directly impact global oil supply, thereby affecting the structure of the futures curve across all delivery periods.