SHORT-TERM ENERGY OUTLOOK
Note : This edition of the Short-Term Energy Outlook ( STEO ) is the first to include forecasts for 2023 .
The STEO continues to reflect heightened levels of uncertainty as a result of the ongoing COVID-19 pandemic . Notably , the Omicron variant of COVID-19 raises questions about global energy consumption . U . S . real GDP declined by 3.4 % in 2020 from 2019 levels . Based on forecasts that use the IHS Markit macroeconomic model , we estimate U . S . GDP increased 5.7 % in 2021 and that it will rise by 4.3 % in 2022 and by 2.8 % in 2023 . In addition to macroeconomic uncertainties , uncertainty about winter weather and consumer energy demand also present a wide range of potential outcomes for energy consumption . Supply uncertainty in the forecast stems from uncertainty about OPEC + production decisions and the rate at which U . S . oil and natural gas producers will increase drilling .
Brent crude oil spot prices averaged $ 71 per barrel ( b ) in 2021 , and we forecast Brent prices will average $ 75 / b in 2022 and $ 68 / b in 2023 .
We estimate global liquid fuels inventories fell by an average of 1.4 million barrels per day ( b / d ) in 2021 compared with inventory growth of 2.1 million b / d in 2020 . Global oil inventories rise in the forecast , increasing at a rate of 0.5 million b / d in 2022 and 0.6 million b / d in 2023 .
Global consumption of petroleum and liquid fuels averaged 96.9 million b / d in 2021 , up by 5.0 million b / d from 2020 , when consumption fell significantly because of the pandemic . We expect global liquid fuels consumption will grow by 3.6 million b / d in 2022 and 1.8 million b / d in 2023 .
Crude oil production from OPEC member countries averaged 26.3 million b / d in 2021 , up from 25.6 million b / d in 2020 . We forecast that average OPEC crude oil production will rise by 2.5 million b / d to average 28.8 million b / d in 2022 and average 28.9 in 2023 .
U . S . crude oil production averaged 11.2 million b / d in 2021 . We expect production to average 11.8 million b / d in 2022 and to rise to 12.4 million b / d in 2023 , which would be the highest annual average U . S . crude oil production on record . The current record is 12.3 million b / d , set in 2019 .
U . S . regular gasoline retail prices averaged $ 3.02 per gallon ( gal ) in 2021 , compared with an average of $ 2.18 / gal in 2020 . We forecast gasoline prices will average $ 3.06 / gal in 2022 and $ 2.81 / gal in 2023 . U . S . diesel fuel prices averaged $ 3.29 / gal in 2021 , compared with $ 2.56 / gal in 2020 , and we forecast diesel prices will average $ 3.33 / gal in 2022 and $ 3.27 / gal in 2023 .
The natural gas spot price at Henry Hub averaged $ 3.91 per million British thermal units ( MMBtu ) in 2021 . Monthly average prices reached $ 5.51 / MMBtu in October , but they declined in November and December as mild weather prevailed across much of the country , resulting in less natural gas used for space heating . We expect Henry Hub spot prices will average $ 3.82 / MMBtu in the first quarter of 2022 and average $ 3.79 / MMBtu for all of 2022 and $ 3.63 / MMBtu in 2023 .
We estimate that U . S . liquefied natural gas ( LNG ) exports averaged 9.8 billion cubic feet per day ( Bcf / d ) in 2021 , compared with 6.5 Bcf / d in 2020 . We expect U . S . LNG export capacity increases will contribute to LNG exports averaging 11.5 Bcf / d in 2022 and 12.1 Bcf / d in 2023 .
U . S . dry natural gas production averaged 93.5 Bcf / d in 2021 , up 2.0 Bcf / d from 2020 . Natural gas production in the forecast averages 96.0 Bcf / d for all of 2022 and then rises to 97.6 Bcf / d in 2023 .
U . S . natural gas inventories ended December 2021 at 3.2 trillion cubic feet ( Tcf ), 3 % more than the 2016 – 20 average . We forecast inventories will end March 2022 at 1.8 Tcf , which would be 8 % more than the 2017 – 21 average for the end of March .
U . S . coal production totaled 579 million short tons ( MMst ) in 2021 , up 8 % from 2020 . We expect coal production will increase by 6 % in 2022 and then rise 1 % to a total of 619 MMst in 2023 .
U . S . coal consumption was 545 MMst in 2021 , a 14 % increase from 2020 . The increase reflected more use of coal-fired electricity generation amid high natural gas prices . We expect coal consumption will fall by 2 % in 2022 and then be relatively unchanged in 2023 at a total of 532 MMst in 2023 .
Total U . S . retail sales of electricity remain relatively unchanged in our forecast for 2022 after increasing by 2.2 % in 2021 . Forecast increases in sales to the commercial and industrial sectors in 2022 offset lower sales to the residential sector . We forecast total U . S . retail sales of electricity across all sectors will grow by 1.4 % in 2023 .
The share of U . S . electric power generation produced by natural gas averaged 37 % in 2021 , and we expect it will average 35 %
10 FEBRUARY 2022 | FUEL OIL NEWS | www . fueloilnews . com