Key Takeaways
- The S&P 500 continued its upward trajectory, reaching an intraday record high with a 0.9% increase.
- The U.S. Energy Information Administration (EIA) projects U.S. crude oil production to hit a record 13.41 million barrels per day (BPD) in 2025, but anticipates a decrease in 2026 for the first time since 2021.
- U.S. natural gas futures plummeted 5% to an eight-month low, influenced by increased production and cooler weather forecasts.
- The EIA has revised downward its average price forecasts for both WTI and Brent crude oil for 2025 and 2026.
- A nominee for BLS Commissioner suggested suspending the monthly jobs report in favor of quarterly data, sparking debate over economic data transparency.
The S&P 500 surged by 0.9% on Tuesday, reaching a new intraday record high, signaling continued bullish sentiment in the broader market. This upward movement reflects ongoing investor confidence despite mixed signals from various economic sectors.
In the energy markets, the EIA released its latest Short-Term Energy Outlook (STEO), presenting a nuanced picture for U.S. oil and natural gas. The agency forecasts U.S. crude oil output to reach a record 13.41 million BPD in 2025, an increase from the previous forecast of 13.37 million BPD. However, this growth is expected to reverse, with production projected to decrease in 2026 to 13.28 million BPD, marking the first decline since 2021. This anticipated drop is attributed to lower oil prices reducing drilling activity more than expected. Monthly projections indicate U.S. oil production reaching 13.42 million BPD in August, slightly up from July's 13.41 million, before a forecasted dip to 13.33 million BPD in September.
The EIA also adjusted its crude oil price expectations downward. The average 2025 WTI price is now predicted at $63.58 per barrel, lower than the previous $65.22 forecast. For 2026, the WTI forecast dropped significantly to $47.77, down from $54.82. Similarly, 2025 Brent crude prices are now expected to average $67.22, a reduction from $68.89, with the 2026 forecast falling to $51.43 from $58.48. Global oil production is expected to reach 105.4 million BPD in 2025 and 106.4 million BPD in 2026, while global oil demand is projected at 103.7 million BPD in 2025. U.S. oil demand is forecast to be 20.4 million BPD in 2025 and 20.5 million BPD in 2026.
Meanwhile, U.S. natural gas futures experienced a notable decline, dropping 5% to an eight-month low. This sharp fall is primarily driven by an increase in natural gas production and forecasts for cooler weather, which would reduce heating demand. The EIA forecasts U.S. natural gas production to reach 106.4 billion cubic feet per day (BCF/Day) in 2025, an increase from 105.9 BCF/Day. Demand for natural gas is projected at 91.4 BCF/Day in 2025, rising to 106.1 BCF/Day in 2026. Current U.S. natural gas output is estimated at 117.1 BCF/Day for August, slightly up from July, with a slight decrease expected to 116.9 BCF/Day in September.
In economic policy news, President Trump's pick for the Commissioner of the Bureau of Labor Statistics (BLS) suggested a controversial move: suspending the monthly jobs report. The nominee proposed replacing it with less timely but potentially more accurate quarterly data. This suggestion could significantly alter how key employment figures are reported and analyzed.
Lastly, in agricultural markets, U.S. corn end stocks for August reached 2.117 billion bushels, surpassing estimates of 1.90 billion and the previous result of 1.66 billion. Soybean stocks stood at 290 million bushels, falling below estimates of 353 million and the last result of 310 million. Total wheat stocks were reported at 869 million bushels, slightly less than initial estimates.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.