How low will gas prices in Texas get this year?

Major energy agencies do not provide explicit 2026 WTI price floors. While specific numerical forecasts for the 2026 West Texas Intermediate (WTI) crude oil price floor from major energy agencies such as the International Energy Agency (IEA), U.S. Energy Information Administration (EIA), and OPEC are not explicitly detailed in the provided research, the EIA projects a trend of lower oil prices. The EIA forecasts "lower oil prices in 2026 and 2027 due to persistent stock builds" ^{[^]}. The IEA also publishes monthly Oil Market Reports containing detailed price projections for 2026 ^{[^]}, although specific figures were not available in the summaries.

WTI price influences retail gasoline via crack spreads and cost components. Understanding how a WTI price floor translates to Texas regular unleaded retail prices requires considering historical PADD 3 (Gulf Coast region, including Texas) crack spreads and the overall composition of gasoline prices. Crude oil is historically the most significant component of gasoline's retail price, typically accounting for 50% to 60% ^{[^]}. A crack spread represents the profit margin refiners earn by converting crude oil into refined products like gasoline ^{[^]}. The remaining portion of the retail price covers refining costs, distribution and marketing, and federal/state taxes ^{[^]}.

A lower WTI crude price would directly reduce Texas gasoline prices. If the WTI crude oil price reaches a projected floor, that lower crude price would directly reduce the largest component of retail gasoline prices. While the specific crack spread for 2026, along with other costs such as taxes and distribution, would also influence the final retail price, any significant decrease in WTI, as suggested by the EIA's forecast for lower prices ^{[^]}, would proportionally lead to lower retail gasoline prices in Texas, assuming other cost components remain relatively stable.

Major Texas Gulf Coast refineries plan maintenance reducing capacity in Q3 and Q4 2026. Motiva's Port Arthur refinery is scheduled for a Crude Distillation Unit (CDU) overhaul in September 2026, which typically necessitates a significant reduction or complete halt of crude processing ^{[^]}. This event, along with coker work planned for other periods, is a key factor impacting capacity in the latter half of that year ^{[^]}. Additionally, the ExxonMobil Beaumont Refinery has planned two turnarounds in 2026, with one explicitly noted for "year-end," involving taking units offline for maintenance ^{[^]}.

Specific figures for capacity returning online in 2026 are unavailable in the provided research. The details instead point to periods where refining units will be taken offline due to scheduled maintenance, temporarily decreasing rather than increasing gasoline production capacity during the specified timeframe. Turnarounds and overhauls reduce operational capacity as units undergo inspection, maintenance, and upgrades ^{[^]}. Thus, these activities would lead to a reduction in available output.

EIA demand projections are unavailable in the provided research. The web research results do not contain any information about the EIA's demand projections for Q3 and Q4 2026. Therefore, a comparison between potential capacity changes and demand projections cannot be made based on the available sources. The scheduled maintenance activities at these major refineries suggest potential reductions in gasoline supply during the latter half of 2026.

PADD 3 inventories are projected to peak lower in 2026. The U.S. Energy Information Administration (EIA) Short-Term Energy Outlook (STEO) forecasts that finished motor gasoline inventories in the Gulf Coast (PADD 3) will peak at approximately 68.5 million barrels in 2026, most likely during the first quarter ^{[^]}. This forecast provides an outlook on future supply levels based on expected production, consumption, and trade dynamics in the region.

Historically, higher inventory levels coincided with low prices. PADD 3 finished motor gasoline inventories have reached higher levels during periods when Texas average gasoline prices dropped below the $2.20 per gallon threshold. A notable instance occurred in April 2020, amidst significant demand reductions, when PADD 3 ending stocks of total gasoline peaked at approximately 90.3 million barrels ^{[^]}. During this period, Texas All Grades Conventional Retail Gasoline Prices were significantly below $2.20 per gallon, averaging around $1.748 per gallon ^{[^]}.

The 2026 forecasted peak is significantly lower than past highs. Comparing the 2026 forecasted peak of 68.5 million barrels to these historical instances reveals a projected lower inventory level. The forecasted 2026 peak is approximately 21.8 million barrels lower than the 90.3 million barrels recorded in April 2020 when Texas gasoline prices were well below $2.20 per gallon ^{[^]}. This suggests that current projections do not anticipate a build-up of gasoline stocks to the same degree seen during past periods associated with very low Texas retail gasoline prices.

Mexico's Dos Bocas refinery targets significant fuel production by late 2026. This facility, also known as Olmeca, is designed to process 340,000 barrels per day (bpd) of crude oil, with Pemex aiming for it to achieve this full capacity and produce 280,000 bpd of combined gasoline and diesel by the end of 2026 ^{[^]}. However, the refinery has faced operational challenges, with its crude processing averaging 170,000 bpd in early 2026, yielding 102,000 bpd of fuel. This performance declined further in February 2026, when crude processing dropped to 90,000 bpd, producing only 47,000 bpd of combined gasoline and diesel ^{[^]}. Additionally, reported fires in March and April 2026 could impede its progress toward full capacity ^{[^]}.

Full Dos Bocas output could reshape the U.S. fuel export market. Should the Dos Bocas refinery achieve its target of 280,000 bpd of gasoline and diesel by late 2026, it possesses the potential to significantly displace U.S. fuel exports to Mexico ^{[^]}. Specifically, the refinery's projected output could displace 185,000 bpd of U.S. gasoline exports and 95,000 bpd of U.S. diesel exports to Mexico ^{[^]}. This anticipated reduction in demand for U.S. exports is expected to lead to a localized oversupply of gasoline and diesel in the Texas Gulf Coast, potentially affecting prices in that region ^{[^]}.

Texas gasoline prices are expected to decline during September 2026's blend transition. This anticipated drop is primarily due to the mandated shift from more expensive summer-grade gasoline to cheaper winter-grade blends, a change driven by environmental regulations ^{[^]}. Additionally, a natural decrease in travel demand following the Labor Day holiday and the conclusion of the peak summer driving season will contribute to this seasonal easing of prices ^{[^]}.

Broader forecasts for 2026 suggest an overall lower price environment. The U.S. Energy Information Administration (EIA) forecasts a general decline in average U.S. gas prices for the year ^{[^]}. More specifically, GasBuddy predicts that the yearly average gas prices will fall below $3 in 2026, which would be the lowest average since 2020 ^{[^]}. This overall lower price outlook for the year, combined with typical seasonal factors, indicates that the post-Labor Day period in September 2026 is a strong candidate for the yearly low in Texas gas prices ^{[^]}.

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