June energy market update

The Energy Information Administration (EIA) released its June Short-Term Energy Outlook (STEO) on June 10. The latest report continues to project downward pressure on crude oil prices, driven by global inventory growth exceeding demand. Meanwhile, natural gas prices are forecast to rise as strong export growth continues to outpace US production. View the full June STEO report here for detailed insights on energy prices, production, inventories, and more.

Oil spot prices

The weekly West Texas Intermediate oil spot market price trended lower from the start of the year through May, approaching lows last seen in early 2021. As of June 6, the spot price ticked up to a two-month high of $64.06 per barrel (b) (Figure 1). Recall that in February, oil prices fell below the $70-90/b range they had generally been in for the previous two years.

The June STEO forecasts oil spot prices will decline through the end of the year to $61/b and for 2026 to average $59/b (unchanged from May).

Gas spot prices

Following the multi-decade lows seen in 2024, natural gas spot prices surged last winter due to increased heating demand, touching a two-year high of $5.90/mmBtu (million metric British thermal units) in February. The market has calmed since, driven by milder weather and higher-than-normal storage injections. As of June 6, the weekly spot price has eased to a six-month low of $2.84/mmBtu.

EIA adjusted its natural gas forecast lower in June for the second month in a row, though prices are still expected to increase. Prices are forecast to average $4.00/mmBtu in 2025 (down from May’s estimate of $4.20/mmBtu), and $4.90/mmBtu in 2026.

Rig counts

US drilling activity has edged lower since early May, remaining at reduced levels for the past year. The latest drill rig count fell by four this week to 555 rigs, the lowest weekly rate recorded since November 2021 (Figure 2, left). Compared to the same week of 2024, there were 35 fewer rigs operating in the US this week.

EIA noted that US rig counts fell further than expected in May, and drilling activity is expected to soften further through 2026.

Canadian counts recently broke their seasonal decline, rising by 24 rigs this week to 138 (Figure 2, right). Canadian activity typically surges early in the year, then declines through May as thawing ground conditions limit access to drilling sites. This time last year, there were 22 more rigs in operation.

Crude stock levels

US crude oil stock levels climbed through mid-May to reach a two-year high of 844 million barrels. Stocks have eased since, falling each of the past three weeks to a total of 834 million barrels as of June 6. Though down, stocks are 3% higher than they were at the beginning of the year and 1% higher than the same week last year (Figure 3).