EIA forecasts decline in oil prices, lower natural gas costs
The Energy Information Administration’s February short-term energy outlook is predicting a drop in oil pricing over the next two years as well as a 50% drop in natural gas prices.
In addition, the production of global liquid fuels is expected to lower this calendar year.
“Russia and China remain sources of uncertainty in EIA’s (short-term energy outlook) forecasts,” Joe DeCarolis, EIA administrator, said in a statement. “Global demand for jet fuel has increased as China’s economy has opened up following pandemic lockdowns. Russia’s crude oil exports have largely gone unchanged since the EU instituted a ban on seaborne crude oil imports from Russia. We continue to monitor developments in Russia and China because of their impact on the global energy sector.”
Brent crude oil
The EIA forecast for crude oil says prices will average $83 per barrel in 2023 and $78 per barrel by 2024. The average for 2022 was $101 per barrel.
Russia’s oil production and ability to export petroleum products, several non-OPEC countries’ ability to increase oil production, and China’s loosening of COVID-related restrictions could meaningfully affect this oil price outlook, EIA said.
EIA’s expectation that oil production will outpace consumption is reflected by the continued growth of global oil inventories.
Global liquid fuels
According to EIA, global liquid fuels consumption will increase by 1.1 million barrels per day in 2023. Based on the growth, EIA expects an increase of nearly 2 million barrels per day next year.
Oil production in Russia will average 9.9 million barrels per day in 2023, down 1.1 million from 2022. Russian exports have remained higher than EIA expected following the European Union ban of seaborne crude oil from Russia. However, the European Union ban on seaborne petroleum products from Russia that took effect Feb. 5 will disrupt crude oil production, says EIA.
| Notable Forecast Changes | 2023 | 2024 | ||
| Natural gas price at Henry Hub (current) (dollars per MMBtu) | $3.40 | $4.04 | ||
| Previous forecast | $4.90 | $4.80 | ||
| Percentage change | -30.5% | -15.8% | ||
| U.S. crude oil production (current) (million barrels) | 12.5 | 12.6 | ||
| Previous forecast | 12.4 | 12.8 | ||
| Percentage change | 0.6% | -1.2% | ||
| Russia petroleum & liquid fuels production (current) (million barrels per day) | 9.9 | 9.8 | ||
| Previous forecast | 9.5 | 9.4 | ||
| Percentage change | 3.9% | 3.8% | ||
| China petroleum & liquid fuels consumption (current) (million barrels per day) | 15.8 | 16.2 | ||
| Previous forecast | 15.7 | 16.1 | ||
| Percentage change | 1.0% | 1.0% | ||
The current STEO forecast was released Feb. 7.
The previous STEO forecast was released Jan. 10.
The full EIA short-term energy outlook can be found here. LL
Here is Land Line’s Feb. 7 report on diesel prices.
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