Economy, weather, and CO2
U.S. macroeconomics
To generate the macroeconomic assumptions in the Short-Term Energy Outlook (STEO), we input STEO energy price forecasts into S&P Global’s Short-Term U.S. Macroeconomic Model to produce a conditional macroeconomic forecast. For more details on the macroeconomic model, see our documentation.
Emissions
We forecast U.S. energy-related carbon dioxide (CO2) emissions to decrease by 1.8% in 2026 relative to 2025 and to increase by a 0.5% in 2027. In 2026, decreases in CO2 emissions are due primarily to expected declines in coal consumption and, to a lesser extent, declines in consumption of various petroleum products, most notably motor gasoline and distillate fuel oil. Declines in both coal-related and petroleum-related emissions are expected to continue in 2027 but are counteracted by rising natural gas-related emissions, largely in the form of natural gas-fired electricity generation, resulting in a net increase in total CO2 emissions.
Weather
As the summer months come to an end, we expect warmer weather in the third quarter of 2026 (3Q26)—4% more cooling degree days (CDDs) than 3Q25—to offset cooler weather in 2Q26. Based on our current forecasts and data from the National Oceanic and Atmospheric Administration, we expect temperatures in August will be warmer than both August 2025, with 13% more CDDs, and the monthly 10-year average, with 2% more CDDs. Overall, our forecast assumes the United States will average around 1,200 CDDs this summer (June–September), 2% more CDDs than last summer and 1% more CDDs than the 10-year average.
