US Energy Outlook Foresees Falling Fuel Prices

The U.S. Energy Information Administration in Washington has issued its first short-term energy outlook peeking into 2024, and it is predicting cheaper oil, natural gas and gasoline prices as America’s real gross domestic product inches up by 0.5% over the course of this year.

In projections issued Tuesday, the EIA expects overall domestic energy use to rise by 1% in 2024, with global crude oil inventories rising over the next two years.

“We forecast that the Brent crude oil price will average $83 per barrel in 2023 and fall by 14% in 2024, leading to retail gasoline prices averaging around $3.30 per gallon [in national averages] in 2023 and $3.10 per gallon in 2024,” the report said. Wholesale refining margins are expected to fall 29% in 2023 and by 38% in 2024, with prices continuing to decline.

“The Henry Hub natural gas spot price averages slightly less than $5 per million British Thermal Units in 2023 in our forecast — down close to 25% from last year — as domestic consumption declines and liquefied natural gas exports remain relatively flat. In 2024, we expect natural gas prices to again average slightly below $5 per million BTUs, as dry natural gas production outpaces an increase in LNG exports that results from rising LNG export capacity,” the report continued.

Natural gas production in the Permian region of Texas and the Haynesville region of Texas, Louisiana and Arkansas is expected to grow with the expansion of pipelines this year and next, the report added.

In power generation, electricity created from burning coal is expected to fall from 20% in 2022 to 18% this year nationwide, and dip to 17% in 2024. “This decline will be partially offset by an increase in the forecast share of combined utility-scale solar and wind generation from 16% in 2023 to 18% in 2024,” the report said.