July 9, 2024 - Below are highlights of EIA's most recent Short-Term Energy Outlook. 

Hurricane Beryl. We completed modeling and analysis for this report on July 3, and it does not include any potential effects from Hurricane Beryl. The hurricane hit the Texas Gulf Coast, a major hub for the U.S. energy industry, on July 8. EIA will continue to monitor the effects of the hurricane on critical energy infrastructure and will communicate important information in subsequent reports. 

Crude oil prices. Brent crude oil prices in our forecast average $89 per barrel (b) in the second half of 2024 (2H24), up from $84/b in 1H24. Higher prices in the second half of the year result from our forecast of persistent withdrawals from global oil inventories. We estimate global oil inventories decreased by 0.5 million barrels per day (b/d) in 1H24 and will fall by 0.7 million b/d in 2H24. Inventory withdrawals stem in part from OPEC+ production cuts, which the group announced in early June would remain at current levels until at least the end of September.

Gasoline expenditures. A combination of falling gasoline prices, increased vehicle efficiency, and rising incomes mean U.S. households will spend about 2.3% of disposable income on gasoline in 2024 and 2.2% in 2025, less than average for the 2015–2023 period. Our regular grade retail gasoline price forecast of around $3.50 per gallon (gal) for 2025 is slightly less than the 2023 annual average and $0.50/gal less than the 2022 annual average.

Natural gas prices. We forecast the Henry Hub natural gas spot price will average almost $2.90 per million British thermal units (MMBtu) in 2H24, up from $2.10/MMBtu in 1H24. Natural gas prices fell in early 2024 because of mild winter weather that reduced demand for natural gas for space heating. However, low prices reduced natural gas-directed drilling and led producers to curtail some production, and we expect dry production of U.S. natural gas in 2H24 to remain near 104 billion cubic feet per day (Bcf/d) compared with a record of more than 106 Bcf/d in December 2023.

Natural gas inventories. At the end of June, there was 19% more natural gas in U.S. inventories than the five-year average (2019–2023). We expect less natural gas injected into storage than the five-year average this summer season because of relatively flat production in 2H24 and a seasonal increase in demand from the electric power sector. We forecast inventories will end the injection season in October with 6% more natural gas in storage than the five-year average.

Electricity generation. The U.S. electric power sector generated 5% more electricity in 1H24 than 1H23 because of a hotter-than-normal start to summer and increasing power demand from the commercial sector. We expect a 2% increase in U.S. generation in 2H24 compared with 2H23, with solar power, the fastest growing U.S. source, generating 36 billion kilowatthours (BkWh) more electricity in 2H24 than in 2H23 (an increase of 42%).

Electricity generation. After reviewing the responsiveness of fossil fuel generation to natural gas prices, we now expect more power generation from coal and less from natural gas than we did in our previous forecast, especially during the winter. In the June Short-Term Energy Outlook, we had forecast 18 BkWh less coal generation in 2H24 than in 2H23, we now forecast 10 BkWh more. We had also forecast that 2H24 natural gas generation would be relatively similar to 2H23. We now forecast 21 BkWh less. 

Note: Beginning June 11, 2024, we will publish the shale gas tight oil production data and Drilling Productivity Report data in the Short-Term Energy Outlook (STEO) data tables. These improvements will provide a disaggregated STEO forecast for oil and natural gas production in different regions of the United States. 

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