Short-Term Energy Outlook Expects Falling Prices

Non-OPEC production growth should boost global production of liquid fuels that keep school bus fleets moving to 102.8 million barrels per day by 2024, according to the latest Short-Term Energy Outlook (STEO) report from the U.S. Energy Information Administration.

That’s up from 100 million barrels per day in 2022. However, there’s some uncertainty with these production estimates thanks to Russia’s ongoing war in Ukraine. Also, demand could be affected by easing of COVID-19 restrictions in China and other global economic conditions in the coming months.

Global consumption of liquid fuels, which averaged 99.4 million barrels per day in 2022, could grow to 102.2 million in 2024.

“Our forecast for global consumption of petroleum depends on uncertain economic conditions – especially in China,” said Joe DeCarolis, EIA administrator, in a news release. “How China’s economy changes following its reopening from pandemic lockdowns could have a significant impact on global consumption of petroleum products.”

Other highlights from the report include:

• Crude oil prices averaging $83 a barrel in 2023, down 18% from 2022. It may keep falling to $78 a barrel in 2024 “as global inventories build, putting downward pressure on crude oil prices.”
• Retail gasoline prices in 2023 are expected to average about $3.30 per gallon this year and $3.10 in 2024 as wholesale refining margins and crude oil prices drop.
• Diesel prices should average $4.20 per gallon in 2023, down 16% from 2022. Prices may keep falling in 2024, averaging about $3.70 per gallon.
• Electricity production from coal is expected to fall from 20% last year to 18% in 2023 and 17% in 2024. That decline may be offset by an increase in combined utility-scale solar and wind generation, climbing from 16% in 2023 to 18% in 2024.

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