3 minute read
August 2020 Short Term Energy Outlook (STEO
Source: www.eia.gov/forecasts/steo
Liquid fuels
“Daily Brent crude oil spot prices averaged $43 per barrel in July. EIA expects Brent crude prices to average $43 per barrel during the second half of 2020 and rise to an average of $50 per barrel in 2021.”
“U.S. regular gasoline prices averaged $2.18 per gallon in July, about 56 cents lower than this time last year. EIA expects average annual prices to rise from $2.12 per gallon in 2020 to $2.23 per gallon in 2021.”
“EIA expects global liquid fuels inventories will decline at a rate of 4.2 million barrels per day in the second half of 2020 after rising at a rate of 6.4 million barrels per day in the first half of the year.”
“EIA estimates demand for global liquid fuels to be down 8.1 million barrels per day in 2020 and supply down 6.4 million barrels per day. Supply of liquid fuels fell by less than demand in the second quarter of 2020 and will likely increase more slowly. EIA expects supply to reach 99.4 million barrels per day in 2021, or 1.3 million barrels less than 2019 levels, and demand to reach 100.2 million barrels per day, or 1.1 million barrels less than 2019 levels.”
“Consumption of U.S. liquid fuels was 20 percent lower in the second quarter of 2020 than it was during the same period in 2019. EIA expects consumption to rise through the end of 2021, though the estimated average of 20 million barrels per day in 2021 would still be a 0.4 million barrels per day less than in 2019.”
“In the August STEO, EIA reduced its estimates for U.S. crude oil production in 2020 by 370,000 barrels per day compared with the July STEO. We now expect U.S. crude production to average 11.3 million barrels per day in 2020 and 11.1 million barrels per day in 2021, down from 12.2 million barrels per day in 2019. May’s average U.S. crude oil production was 1.2 million barrels per day lower than we assessed in July, indicating more extensive production curtailments than previously estimated.”
Natural Gas
“EIA expects sharp increases in U.S. natural gas prices this fall and winter, rising from an average $2.11 per million British thermal units in September to $3.12 per
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million British thermal units in January. EIA forecasts that Henry Hub natural gas spot prices will average $2.03 per million British thermal units in 2020 and $3.14 per million British thermal units in 2021.”
“EIA estimates natural gas consumption by the electric power sector for July was the highest monthly average on record. However, we still expect consumption to decline 3 percent from 2019 to 2020, primarily as a result of a forecast 4.4 percent decline in consumption in the industrial sector.”
“After setting an annual record in 2019, natural gas production has fallen as low oil and natural gas prices caused producers to cut back on drilling. EIA estimates U.S. dry natural gas production to be down 3.6 billion cubic feet per day in 2020 and decline a further 4.6 billion cubic feet per day in 2021.”
“U.S. liquefied natural gas exports averaged 3.1 billion cubic feet per day in July, down 2.4 billion cubic feet from the second quarter of 2020. Low international prices has led to numerous cargo cancellations, and EIA expects U.S. LNG exports to remain low in the coming months.”
Coal
“After dropping to the lowest monthly total on record since at least 1973 in April, U.S. coal consumption will rise slightly in the third quarter but remain below 2019 levels through the end of 2020. EIA forecasts U.S. coal production to decrease 29 percent in 2020 from 2019 levels before recovering 12 percent in 2021.”
Electricity
“EIA expects U.S. electricity consumption will be 3.6 percent lower in 2020, with the commercial sector accounting for the largest decline on a percentage basis. Consumption is expected to rise 0.8 percent in 2021.”
Emissions
“EIA forecasts that U.S. energy-related carbon dioxide (CO2) emissions will decrease a record 11.5 percent in 2020 before increasing 5.6 percent in 2021. The decline in CO2 emissions this year is driven by less energy consumption related to country-wide restrictions on business and travel activity and the resulting slowing economic growth.” ▫
