EIA adjusts crude oil forecast

March 13, 2024

SJ Munoz


In its March short-term energy outlook, the Energy Information Administration changed its Brent crude oil forecast despite the expectation of continued growth in U.S. crude oil production.

“Some significant sources of uncertainty remain in our crude oil forecasts, including how the Red Sea conflict could affect production and how strictly OPEC+ members will adhere to their voluntary production cuts,” EIA Administrator Joe DeCarolis said in a statement.

Conversely, natural gas costs are expected to continue to lower as domestic natural gas production also decreases in 2024.

“Some producers have announced curtailments in production or reductions in upstream spending on natural gas-directed activities this year,” DeCarolis said. “But with so much domestic natural gas production tied to the growing crude oil production, we expect natural gas production to decrease far more slowly than prices have.”

EIA still anticipates a downward trend in fuel prices for at least the first half of 2024, with an average of $3.92 per gallon in the second quarter of this year.

EIA is forecasting that average to increase to $4.18 per gallon in the first quarter of 2025 before decreasing through the end of next year.

The next two years could see an all-time high in driving activity, according to EIA. In 2023, drivers in the U.S. averaged 8.9 billion vehicle miles traveled per day.

  2022 2023 2024 2025
Brent crude oil
(dollars per barrel)
100.94 82.41 87.00 84.80
Diesel retail price
(dollars per gallon)
5.01 4.21 4.01 4.08
U.S. crude oil production
(million barrels per day)
11.91 12.93 13.19 13.65
Natural gas spot price
(dollars per million BTU)
6.42 2.54 2.27 2.94

EIA forecasts solar generation to increase in 2024 due to a 36-gigawatt increase in solar-generating capacity.

Coal exports are expected to increase this year and even more so in 2025 as coal consumption by the U.S. electric power sector decreases.

The full short-term energy outlook can be found on the EIA website. LL

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