The US Energy Information Administration increased its forecast for 2027 US diesel prices to $5.03 a gallon in its November outlook, up 12% from its October estimate of $4.49 a gallon. The upward revision reflects ongoing supply constraints that are expected to persist through the end of next year.
Damaged refineries in the Middle East and Russia have reduced petroleum-product exports, constraining global supply even as crude prices are projected to decline. The EIA expects Brent crude to average $86 a barrel in 2027, down from a projected $97 this year, but lower crude costs are not translating into equivalent fuel-price relief at the pump.
The agency attributes the price support to wider margins between refined-product prices and crude costs, a gap expected to persist as refineries operate at constrained capacity. US refinery crude inputs are forecast at 16.5 million barrels a day in 2027, compared to 16.7 million this year, despite similar utilization rates. The EIA warns that unplanned outages and deferred maintenance could further disrupt refinery operations, though it expects supply constraints to ease as the year progresses.
Higher fuel costs can amplify broader inflation pressures. Federal Reserve Vice Chair for Supervision Michelle Bowman noted in a November speech that elevated production and transportation costs could pass through to consumer prices and keep core inflation elevated. If fuel costs prolong inflation and delay monetary easing, the effect could constrain investor risk appetite across asset classes including Bitcoin, which has historically shown sensitivity to US monetary policy and risk-taking conditions through financial markets.
However, some countervailing factors may limit the duration of price pressure. Bowman reported recent signs of refined-product price retracement and normalizing margins, and the Fed still expects core personal consumption expenditures inflation to move closer to its 2% target next year.
