Government forecasts expect oil and natural gas prices to fall this winter season, which has been warmer than usual so far.
The U.S. Energy Information Administration lowered its Henry Hub spot price forecast for natural gas to $2.80 per million British thermal units on Tuesday, down 60 cents per million BTUs from November’s short-term energy outlook.
“The downward revision reflects both a warmer-than-average start to the winter, which has reduced demand for space heating in the commercial and residential sectors, and high natural gas production,” the EIA said in a news release. “These two factors have increased natural gas storage inventories. We forecast U.S. natural gas inventories will end the winter 22% above the five-year average (2018–2022), with more than 2,000 billion cubic feet in storage.”
The agency also lowered its crude oil price prediction. It had expected an average price of $78 per barrel in December to rise to an average of $84 per barrel in the first half of 2024, citing announced production cuts by petroleum exporting countries.
“Despite the announced cuts, we lowered our forecast for the Brent price in 2024,” the agency said. “We expect the Brent spot price will average $83/b next year, down from our forecast of $93/b in last month’s STEO.”
Net exports of U.S. crude oil and petroleum products are expected to hit a record high of nearly 2 million barrels a day in 2024, up from about 1.8 million barrels per day this year and $1.2 million in 2022. “This growth is primarily driven by an increase in U.S. crude oil and hydrocarbon gas liquids production,” the EIA said.
The agency expects that 23 gigawatts in new solar power capacity this year and 37 gigawatts expected to be added in 2024 will help the nation’s solar providers grow by 15% this year and 39% next year.
“We expect solar and wind generation together in 2024 to overtake electric power generation from coal for the first year ever, exceeding coal by nearly 90 billion kilowatthours.”
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