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Drivers to Spend Less Income on Gasoline This Year, Forecasters Say

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More: Read the Energy Information Administration’s full report.

U.S. energy forecasters predict that American households will spend 2.2% less on gasoline this year than they did on average from 2015 to 2023.

July’s short-term outlook from the U.S. Energy Information Administration reports that drivers are benefiting from several factors. Those include falling gas prices, increased fuel efficiency in their vehicles and generally rising incomes.

Regular grade retail prices per gallon will average around $3.5o per gallon next year, slightly less than the 2023 annual average, forecasters said. Brent crude oil prices could average $89 per barrel in the second half of 2024, up from an $84 average in the first half of this year. Economists cited inventory reductions associated with an OPEC+ retreat in oil production for the rising prices.

The July report did not reflect any effects from Hurricane Beryl on east Texas coast oil and gas infrastructure because analysts completed modeling before the storm.

Electricity, Natural Gas

Natural gas prices are expected to average $2.90 per million British thermal units in the last two quarters of this year, up from $2.10 in the first half of 2024. “Natural gas prices fell in early 2024 because of mild winter weather that reduced demand for natural gas for space heating,” forecasters said. “However, low prices reduced natural gas-directed drilling and led producers to curtail some production.”

The nation’s electricity sector produced 5% more power in the first half of the year, the report said, citing a hotter-than-average early summer. “We expect a 2% increase in U.S. generation” in the second half of the year compared with the second half of 2023, the forecasters said, “with solar power, the fastest growing U.S. source, generating 36 billion kilowatt-hours more” in the second half of this year compared with the second half of 2023.

The EIA compared generation costs between coal-burning sources and gas-burning power plants and predicted more generation from coal than gas than it did in its previous forecast.

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