The U.S. government foresees rising oil prices and more new solar power generation in the near future, along with a continuing decline in the use of coal to fuel power generation.
In its July Short-Term Energy Outlook released Tuesday, the U.S. Energy Information Administration is also assuming larger than expected economic growth in the nation, with its forecasts assuming a 1.5% rate of growth in the country’s gross domestic product for the rest of this year, and a 1.3% growth rate in 2024, up from 1.3% and 1.0% in last month’s forecast.
Crude oil prices are expected to aver $78 per barrel in July and rise to around $80 in the fourth quarter of this year, reaching $84 in 2024 as global crude inventories decline over the next five quarters.
Natural gas prices are also expected to go up as declining production narrows an existing surplus. The benchmark Henry Hub price in the forecast would reach $2.80 per million British thermal units, historically very low but up from an average of $2.40 in the first half of this year.
The EIA reported that solar was the leading source of new electricity generation in the first half of the year, and that new capacity “contributes to our forecast of 23% more U.S. solar generation this summer than last summer, the outlook said. “The increase in solar capacity, along with lower natural gas prices, reduces our forecast of coal-fired electricity generation this year” to 75 billion kilowatt hours, down 18% from 2022.
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