Forecast overview
- Crude oil prices. Although crude oil prices have fallen recently, we continue to expect crude oil prices will rise in the second half of 2024 (2H24). The Brent crude oil spot price ended July at $81 per barrel (b), compared with an average for the month of $85/b. We expect the Brent price will return to between $85/b and $90/b by the end of the year. Rising crude oil prices in our forecast are the result of falling global oil inventories. We estimate global oil inventories decreased by 0.4 million barrels per day (b/d) in 1H24 and will fall by 0.8 million b/d in 2H24. Inventory withdrawals stem in part from ongoing OPEC production cuts. Although we expect crude oil prices to rise in the coming months, our forecast for the annual average Brent crude oil price in 2025 is down from a forecast of $88/b in our July STEO, owing mostly to reduced oil consumption.
- World oil consumption. We forecast that global consumption of liquid fuels will increase by 1.1 million b/d in 2024 and 1.6 million b/d in 2025, down from a forecast of 1.8 million b/d in our previous STEO. Most of the reduction in our oil consumption forecast is in China, where we expect slowing economic growth will continue to reduce diesel consumption.
- Jet fuel consumption. Jet fuel consumption is rising based on increased air travel. In our August STEO, we forecast 3% more U.S. jet fuel consumption in 2024 compared with 2023 and growth of another 3% in 2025. In our forecast, U.S. jet fuel consumption exceeds 2019’s pre-pandemic level in 2025. We expect that relatively strong jet fuel consumption will cause jet fuel prices to rise by more than prices for other fuels in 2025.
- Natural gas markets. Following a very hot July across much of the United States, we expect slightly milder weather in August will reduce natural gas consumption. We forecast natural gas consumed to generate electricity generation will average 46 billion cubic feet per day (Bcf/d) in August, down 2% from July. Dry natural gas production in our forecast for August stays close to its level in July. Because of falling consumption and flat production, we expect the Henry Hub price to stay relatively low, remaining below $2.50/MMBtu through October. However, we expect seasonal increases in consumption for space heating, along with a ramp up in liquefied natural gas (LNG) exports from new facilities in Texas and Louisiana, will push the Henry Hub price to average about $3.10/MMBtu from November through March.
- Electricity prices. Residential electricity price are increasing more slowly because of lower natural gas prices. We expect electricity prices will rise by about 1% this year for residential customers, which would be the lowest percentage growth since 2020. Natural gas prices started falling in 2023, and the resulting lower costs of producing electricity are now being reflected in retail electricity prices as regulatory authorities approve new rates.
| Notable Forecast Changes | 2024 | 2025 |
|---|---|---|
Note: Values in this table are rounded and may not match values in other tables in this report. |
||
| World liquid fuels consumption growth (million barrels per day) | 1.1 | 1.6 |
| Previous forecast | 1.1 | 1.8 |
| Change | 0.0 | -0.2 |
| Brent crude oil spot price (dollars per barrel) | 84 | 86 |
| Previous forecast | 86 | 88 |
| Percentage change | -2.2% | -3.0% |
You can find more information in the detailed table of forecast changes.