EIA forecasts rising electricity demand, natural gas prices

July 11, 2024

SJ Munoz

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Increased demand as well as costs are expected for several sectors, according to the July Energy Information Administration short-term energy outlook.

Overall electricity demand is expected to increase by 2% from last year in the second half of 2024. Natural gas prices will be approximately 36% higher in the second half of the year compared to the first half, EIA said. As a result, EIA is forecasting 42% more electricity generation from solar during that same period.

“The increase in electricity demand paired with a decrease in natural gas generation creates a gap between the power we need and the power being produced,” EIA Administrator Joe DeCarolis said. “Utilities will look for a more economical alternative as natural gas prices go up. Since so much renewable capacity has been coming online the last couple of years, we expect renewables—especially solar—to fill most of the gap in the power mix. We expect utilities will also look to coal as a less expensive fuel source the rest of the year.”

The price of Brent crude oil is also expected to increase to $89 per barrel in the second half of 2024 before averaging $91 per barrel in the first quarter of 2025. In the first half of 2024, the average price per barrel was $84.

That increase largely comes from EIA’s forecast of declining global crude oil supplies as global oil production decreases and global consumption of liquid fuels increases.

Notable Forecast Changes 2024 2025
Electric power sector consumption from coal (billion kilowatthours) 688 674
Previous forecast 655 609
Percentage change 5.1% 10.8%
Electric power sector coal inventories(million short tons) 115 85
Previous forecast 131 138
Percentage change -11.9% -38.5%
Note: Values in this table are rounded and may not match values in other tables in this report.
The current STEO forecast was released July 9.
The previous STEO forecast was released June 11.

Severe weather could alter subsequent short-term energy outlooks, EIA said.

In addition to above average temperatures to start the year, Hurricane Beryl made landfall on the Texas Gulf Coast on Monday, July 8, while the EIA forecast was completed on July 3. EIA said it will continue to monitor the effects of the hurricane on critical infrastructure in this major energy hub and will communicate updated information in future reports.

Average diesel prices are updated daily on this Land Line resources page.

In the third quarter of 2024, EIA is forecasting a national average diesel price of $3.84 per gallon. That average is expected to increase to $3.90 per gallon by the end of 2024

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

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