EIA expects mixed energy prices for 2024

According to the latest forecast from the U.S. Energy Information Administration (EIA), residential electricity prices in the United States will increase by about 1% in 2024. This is the lowest annual growth rate since 2020.

Natural gas prices have fallen since the end of 2023 and these lower prices are now being factored into electricity rates for residential customers, the EIA said.

Natural gas accounts for the largest share of electricity generation in the United States.

Conversely, the EIA believes that the price of Brent crude oil could rise to around $87 per barrel by year-end. The price of Brent crude oil is currently below $80 per barrel. The EIA believes that continued oil production cuts by OPEC+ will reduce global oil inventories by the first quarter of 2025, which will likely push oil prices higher.

“The good news from a consumer perspective is that while we expect oil prices to rise, we expect gasoline prices to remain lower this year and next than in 2023,” EIA Administrator Joe DeCarolis said in a press release. “U.S. motorists are using less gasoline than they did before the pandemic, and we expect this will help keep gasoline prices from rising with oil prices.”

Other highlights from EIA’s August Short-Term Energy Outlook include:

• Natural gas. The EIA expects the U.S. to use about 2% less natural gas to generate electricity in August than in July as U.S. temperatures return to normal and demand for air conditioning eases. U.S. natural gas use for electricity generation hit a monthly record in July, even though Hurricane Beryl left millions of Texas homes and businesses without power for several days earlier in the month.
• jet fuel. The EIA projects that U.S. jet fuel consumption will exceed pre-pandemic levels in 2025. U.S. jet fuel consumption is primarily driven by demand for commercial air travel, which in turn can be affected by economic activity, employment, and the cost of air travel. Sources of uncertainty in the forecast include problems in the aircraft supply chain, which could exacerbate aircraft shortages and air traffic controller shortages.