Petroleum products

U.S. crude oil production
We forecast U.S. crude oil production will generally decline from almost 13.5 million barrels per day (b/d) in April 2025 to 13.3 million b/d by the end of 2026, practically unchanged from our June STEO. The drop in U.S. crude oil production reflects our expectation that the WTI crude oil spot price will fall through 2026, ending the year at $53 per barrel (b), a decline of about 22% from the June 2025 price. Declining prices mean U.S. oil producers will drill and complete fewer wells.

U.S. producers have slowed drilling and completion activity this year. In 1H25, well completions in the oil-producing regions of the Lower 48 states totaled 5,164 wells. This number excludes Alaska and the Gulf of America, which do not produce tight oil and are subject to different investment and production cycles. It also excludes Haynesville and Appalachia, which primarily produce natural gas. This year had the fewest completions in the first six months of any year since 2021.

Last year, higher oil output per well meant that U.S. crude oil production grew despite relatively low well completions. This year, productivity growth has been mixed; crude oil production from newly completed wells is growing more slowly or declining in the major oil-producing regions. We assess the muted productivity growth will be insufficient to offset the low drilling and completion activity observed in the falling rig count and number of wells completed.

With falling crude oil prices in our forecast, we expect recent downward trends in rig counts and well completions to continue. We estimate that U.S. producers would have to complete more than 5,400 wells in 2H25 to match the number of wells completed in all of 2024. About the same number of wells (5,500) were completed in 2H23 when oil prices were much higher.

U.S. distillate consumption
Lower economic growth in 2025 than we initially expected at the beginning of the year has led to less consumption of distillate fuel both in history and in our forecast. In our current STEO, we expect U.S. distillate consumption will decline 30,000 b/d in 2H25 compared with 2H24. In our January STEO, we forecast distillate consumption to grow by 80,000 b/d in 2H25. Similarly, in our January STEO, we forecast growth of about 190,000 b/d in 1H25 compared with 1H24. However, U.S. distillate consumption declined about 10,000 b/d.

Historically, economic growth and distillate consumption are positively correlated. The decline in distillate consumption this year has been driven by a slowdown in industrial activity and amplified by general economic uncertainty.

The most recent data from the Bureau of Economic Analysis shows U.S. real GDP decreased at an annual rate of 0.5% in 1Q25, and we estimate it increased by 1.1% in 2Q25, based on forecasts from S&P Global. Our January STEO assumed forecast growth of 1.7% in 1Q25 and 1.8% in 2Q25. Our reduced GDP growth forecast in the July STEO contributes to our forecast that distillate consumption this year will decline compared with 2024. We anticipate distillate consumption will grow by about 30,000 b/d in 2026.

The latest Institute for Supply Management’s Manufacturing Purchasing Managers Index (PMI), a survey of U.S. purchasing and supply executives, contracted in May for the third consecutive month. This contraction indicates that economic activity in U.S. manufacturing is slowing down. This slowdown is consistent with trucking activity, measured by the American Trucking Association For-Hire Truck Tonnage Index, which decreased by 1.3% from May last year, the first year-on-year decrease in 2025.