January 9, 2024 - Below are the highlights of EIA's most recent Short-Term Energy Outlook:

This STEO will be the first to include forecasts for 2025.

Electricity generation. We expect solar power to be the leading source of growth in electricity generation in both 2024 and 2025 as 36 gigawatts (GW) and 43 GW of new solar capacity come on line, respectively. The new capacity will boost the solar share of total generation to 6% in 2024 and 7% in 2025, up from 4% in 2023. We forecast that overall U.S. electricity generation will grow by 3% in 2024 and be unchanged in 2025. Driven by our forecast of rising generation from solar and to a lesser extent wind, we expect that electricity generation from coal will decline by 9% in 2024 and by 10% in 2025, due to a combination of higher costs compared with renewables and another 12 GW of coal-fired capacity retiring over the next two years. We expect that electricity generation from natural gas will be unchanged in 2024 and 2025 compared with 2023.

U.S. crude oil production. Our forecast of crude oil production in the United States reaches 13.2 million barrels per day (b/d) in 2024 and more than 13.4 million b/d in 2025, both of which would be new records. Production growth continues over the next two years driven by increases in well efficiency. However, growth slows because of fewer active drilling rigs.

Global liquid fuels consumption. We expect growth in global liquid fuels consumption will be lower over the next two years: forecast consumption grows by 1.4 million b/d (1.4%), in 2024 and by 1.2 million b/d (1.2%) in 2025. Although growth in 2024 and 2025 is less than the 1.9 million b/d growth in 2023, it is largely consistent with the 1.2% average annual growth in global liquid fuels consumption over the 20 years from 2004–2023. We attribute the reduction in growth to slowing oil demand growth in China due to stalling GDP growth, increasing vehicle fleet efficiency, and an end to pandemic recovery-related growth in 2023. Despite lower oil demand growth, global consumption of liquid fuels still reaches a new record of over 103.5 million b/d in 2025.

Global liquid fuels production. We forecast that global liquid fuels production growth also slows. Production rises by 0.6 million b/d in 2024, down from 1.7 million b/d of growth in 2023, as OPEC+ continues its policy of production restraint and U.S. tight oil production growth decelerates. In 2025, we forecast global liquid fuels production will rise by 1.6 million b/d, about 50% of which is rising OPEC+ crude oil production.

Crude oil prices. We forecast that the Brent crude oil price will average $82 per barrel (b) in 2024, about the same as in 2023, and then fall to $79/b in 2025, when we expect production growth will slightly outpace demand growth, allowing inventories to build modestly and place some downward pressure on crude oil prices. Recent developments in the Middle East increase the risk for supply disruptions over the forecast, which could result in higher and more volatile prices we currently forecast. One of this month’s Between the Lines articles takes a closer look at our 2024 and 2025 Brent crude oil price forecast.

U.S. gasoline prices. The U.S. average retail gasoline price declines in our forecast as gasoline inventories increase and gasoline crack spreads fall. We expect U.S. gasoline prices to average around $3.40 per gallon (gal) in 2024 and $3.20/gal in 2025, compared with an average of more than $3.50/gal in 2023.

Natural gas production. U.S. production of dry natural gas in our forecast grows between 1% and 2%, or about 1.5 billion cubic feet per day (Bcf/d) in 2024 and 1.3 Bcf/d in 2025, down from growth of 4.0 Bcf/d in 2023. The slowing growth reflects a drop in natural gas production associated with oil drilling in the Permian Basin. U.S. dry natural gas production of 105 Bcf/d in 2024 and 106 Bcf/d in 2025 would both be records.

Natural gas prices. We expect the spot price of natural gas to average $2.70 per million British thermal units (MMBtu) in 2024 and rise to an average of about $3.00/MMBtu in 2025, up from an average of $2.54/MMBtu in 2023. Prices increase because of slowing growth in natural gas production and increasing U.S. liquefied natural gas exports, particularly in 2025 following the addition of new export capacity in late 2024. However, we expect upward price pressures will be limited by relatively flat consumption of natural gas in the electric power sector and persistently high inventories.

Coal production. Faced with continuing declines in coal consumption in the electric power sector, we expect U.S. coal production will decline by more than 90 million short tons (MMst) to less than 490 MMst in 2024 and then fall below 430 MMst in 2025, the least coal produced in the United States since the early 1960s.

To see the full report, visit: https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf.