EIA outlook expects higher oil prices, consumption

Don’t expect the trend of falling Brent crude oil prices to continue, according to the Energy Information Administration’s short-term energy outlook released on Tuesday, Aug. 6.

In fact, EIA is forecasting the average price of Brent crude oil to increase to $87 per barrel by the end of 2024. Currently, that average price is below $80 per barrel.

Continued oil production cuts from OPEC+ are expected to further reduce global oil inventories through the first quarter of 2025, pushing oil prices up, EIA said.

Global consumption of liquid fuels is predicted to increase by 1.1 million barrels per day this year and by 1.6 million barrels per day in 2025. China is expected to be the outlier due to a continued reduction in diesel consumption.

“The good news from a consumer perspective is that even though we expect oil prices to increase, we expect gasoline prices through this year and next year to remain lower than they were in 2023,” EIA Administrator Joe DeCarolis said.

Diesel is forecasted to average $3.77 per gallon in the third quarter of 2024 and $3.79 per gallon by the end of the year. The August EIA outlook shows that average will remain below $4 throughout 2025.

The OOIDA Foundation weighed the pros and cons of alternative fuel in a recent educational series.

EIA also expects an increase in electricity prices – but by only about 1% for residential customers. This would be lowest percentage of growth since 2020.

Jet fuel consumption is rising due to increased air travel, which will cause jet fuel prices to continue to rise more than other fuel prices in 2025.

More mild weather in August will reduce U.S. natural gas consumption, EIA said.

Note: Values in this table are rounded and may not match values in other tables in this report.
The current STEO forecast was released August 6.
The previous STEO forecast was released July 9.

The full short-term energy outlook is available on the EIA website. LL

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