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EIA SHORT-TERM ENERGY OUTLOOK
Forecast overview
• Global oil prices . We expect voluntary OPEC + crude oil production cuts and ongoing geopolitical risks will keep the Brent crude oil spot price near $ 90 per barrel ( b ) for the remainder of 2024 before falling to an average of $ 85 / b in 2025 as global oil production growth picks up .
• Global oil production tables . This month we are publishing streamlined global oil data tables . These tables provide a more complete breakout of OPEC + production data and provide a new breakout of world crude oil and other liquid fuels production .
• U . S . retail gasoline prices . Across the United States , we forecast that retail gasoline prices will average near $ 3.70 per gallon from April through September , which is similar to prices during the same period last year . Refinery operations are a source of uncertainty for gasoline markets this summer . An upcoming Perspectives supplement looks in more depth at the effect refinery operations could have on retail gasoline prices .
• Electricity generation . Solar supplies most of our forecast growth in U . S . electricity generation this year . We expect total U . S . electricity generation will grow by 3 % ( 114 billion kilowatthours ) in 2024 , and we forecast generation from utility-scale solar will contribute almost 60 % of that increase . Among other renewable sources , wind contributes 19 % of 2024 U . S . electricity generation growth , and hydropower contributes 13 %.
Release Date : May . 7 , 2024
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PROPANE PRICES SLIGHTLY LOWER
U . S . wholesale and retail propane prices were slightly lower on average this winter than last winter , largely because of mild weather and robust propane inventories heading into this winter heating season . Despite lower prices and lagging domestic demand , however , continuing international demand for U . S . propane contributed to large withdrawals and left end-of-winter propane inventories below last winter ’ s year-end levels .
Wholesale propane prices at the U . S . benchmark at Mont Belvieu , Texas , averaged $ 0.77 per gallon ( gal ) during the 2023 – 24 winter heating season . This price was slightly lower than the $ 0.80 / gal average recorded the previous winter heating season and the $ 1.25 / gal average for the 2021 – 22 winter heating season . Aboveaverage winter temperatures reduced propane consumption in the residential and commercial sectors , particularly in the Midwest and Northeast regions , which are home to about half of the more than 6 million U . S . households that report using propane as a primary space heating fuel .
Typically , propane prices rise during the winter , when demand for propane as a winter heating fuel grows and propane inventories are drawn down . In January 2024 , winter heating needs peaked , as measured by heating degree days , which indicate how cold the temperature was on a given day or during a period of days .
Retail propane prices for the three U . S . regions for which we publish data — the East Coast ( PADD1 ), Midwest ( PADD 2 ), and Gulf Coast ( PADD 3 )— decreased this winter compared with last winter . Prices in all three regions stayed relatively flat until mid- January , when wholesale Mont Belvieu prices began to increase .
On the East Coast , propane prices averaged 1 % lower than last winter , although they increased slightly above last winter beginning in January . In the Midwest , prices stayed well below the previous winter ’ s prices and ended the season 10 % below last winter . On the Gulf Coast , prices began the heating season 7 % below last winter and ended 1 % lower .
The lower retail prices helped keep average household expenditures on winter propane about 3 % lower . Although we originally expected that households would spend $ 1,340 on propane over the winter , our final estimate was $ 1,300 .
Propane inventories reflect supply and demand balances , and inventory levels affect prices . The propane storage injection season typically runs from April through October , followed by a withdrawal season during the winter heating months . Propane inventories remained above the previous five-year range ( 2018 – 19 to 2022 – 23 ) for most of the storage injection season . For the first week of the winter heating season ending November 3 , 2023 , we reported U . S . propane inventories at 98.4 million barrels , 12.2 million barrels more than the five-year average .
The Midwest is the U . S . region with the largest propane demand , and it frequently uses in-region inventories to absorb seasonal changes in propane supply and demand . In addition to the Midwest ’ s high demand for propane for grain drying , about one-third of U . S . households that report using propane as a primary space heating fuel are in the Midwest . Source : Energy Information Administration l FON
10 JUNE 2024 | FUEL OIL NEWS | www . fueloilnews . com