August 8, 2017 - The highlights of EIA's most recent short-term energy outlook are as follows:
Global Liquid Fuels
North Sea Brent crude oil spot prices averaged $48 per barrel (b) in July, $2/b higher than the June average and almost $4/b higher than in July 2016. EIA forecasts Brent spot prices to average $51/b in 2017 and $52/b in 2018. West Texas Intermediate (WTI) crude oil prices are forecast to average $2/b less than Brent prices in both 2017 and 2018. NYMEX contract values for December 2017 delivery that traded during the five-day period ending August 3 suggest that a range of $37/b to $68/b encompasses the market expectation for December WTI prices at the 95% confidence level.
· U.S. regular gasoline retail prices averaged $2.30 per gallon (gal) in July, down 5 cents/gal from the average in June but 6 cents/gal higher than in July 2016. During the April-through-September summer driving season of 2017, U.S. regular gasoline retail prices are forecast to average $2.37/gal, 14 cents/gal higher than last summer. Annual average U.S. regular gasoline retail prices are forecast to be $2.33/gal in both 2017 and 2018.
· U.S. crude oil production averaged an estimated 8.9 million barrels per day (b/d) in 2016 and is forecast to average 9.3 million b/d in 2017. EIA forecasts crude oil production to average 9.9 million b/d in 2018, which would mark the highest annual average production in U.S. history, surpassing the previous record of 9.6 million b/d set in 1970.
EIA forecasts that global petroleum and liquid fuels inventories will be largely unchanged in 2017 and then increase by an average of 0.2 million b/d in 2018.
· U.S. dry natural gas production is forecast to average 73.5 billion cubic feet per day (Bcf/d) in 2017, a 1.2 Bcf/d increase from the 2016 level. Natural gas production in 2018 is forecast to be 3.9 Bcf/d above the 2017 level.
· In July, the average Henry Hub natural gas spot price was $2.98 per million British thermal units (MMBtu), about the same as in June. Higher natural gas exports and growing domestic natural gas consumption in 2018 contribute to the forecast Henry Hub natural gas spot price rising from an annual average of $3.06/MMBtu in 2017 to $3.29/MMBtu in 2018. NYMEX contract values for December 2017 delivery that traded during the five-day period ending August 3 suggest that a range of $2.17/MMBtu to $4.48/MMBtu encompasses the market expectation for December Henry Hub natural gas prices at the 95% confidence level.
Electricity, Coal, Renewables, and Emissions
· Total U.S. electricity generation from utility-scale power plants averaged 11,145 gigawatthours per day in 2016. Forecast U.S. generation declines by 1.2% in 2017, which mostly reflects expectations of milder temperatures in the third quarter of 2017 compared with the same period last year. Forecast generation grows by 1.8% in 2018 based largely on a forecast of colder temperatures during the first quarter 2018 compared with the same period in 2017 and on the expectation of a growing economy.
· EIA expects the share of U.S. total utility-scale electricity generation from natural gas to fall from an average of 34% in 2016 to about 31% in 2017 as a result of higher natural gas prices, increased generation from renewables and coal, and lower electricity demand. Coal's forecast generation share rises from 30% last year to almost 32% in 2017. The projected generation shares for natural gas and coal are nearly identical in 2018, averaging between 31% and 32%.
· Coal exports for the first five months of 2017 were 37 million short tons (MMst), which was 60% higher than coal exports over the same period last year. EIA expects growth in coal exports to slow in the coming months, with exports for all of 2017 forecast at 70 MMst, 17% above the 2016 level. The increase in coal exports contributes to an expected 58 MMst (8%) increase in coal production in 2017. In 2018, coal production is forecast to increase by 10 MMst (1%).
· Wind electricity generating capacity at the end of 2016 was 81 gigawatts (GW). EIA expects wind capacity additions in the forecast will bring total wind capacity to 88 GW by the end of 2017 and to 102 GW by the end of 2018.
· Total utility-scale solar electricity generating capacity at the end of 2016 was 22 GW. EIA expects solar capacity additions in the forecast will bring total utility-scale solar capacity to 29 GW by the end of 2017 and to 32 GW by the end of 2018.
· After declining 1.7% in 2016, energy-related carbon dioxide (CO2) emissions are projected to decrease 0.3% in 2017 and then to increase 2.0% in 2018. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, and energy prices.