- Crude oil prices: The forecast suggests that crude oil prices will experience some upward pressure, particularly in late 2023 and early 2024. The Brent crude oil spot price is expected to average $79 per barrel in the second half of 2023 and $84 per barrel in 2024.
- Global oil inventories: It is projected that global oil inventories will decrease slightly over the next five quarters, which indicates a tightening of the oil market.
- Global oil consumption: The forecast indicates an increase in global liquids fuels consumption. It is predicted to rise by 1.6 million barrels per day in 2023 and an additional 1.7 million barrels per day in 2024. Most of this growth is expected to come from non-OECD countries.
- U.S. economy: The forecast predicts a lower GDP growth rate for the United States. The projected growth is 1.3% in 2023 and 1.0% in 2024, down from the previous forecast of 1.6% in 2023 and 1.8% in 2024. Lower GDP growth is expected to reduce total U.S. energy consumption.
- U.S. distillate fuel consumption: The reduction in forecast GDP growth is expected to result in a decrease in U.S. distillate fuel consumption in 2024. This is a change from the previous forecast, which anticipated growth in distillate consumption.
- U.S. liquid fuels consumption: Overall, U.S. liquid fuels consumption is expected to increase in both 2023 and 2024. The growth is driven by factors unrelated to economic growth, with gasoline and jet fuel consumption leading the growth in 2023 and propane and ethane consumption driving growth in 2024.
- Natural gas production: The forecast suggests a slight decline in U.S. dry natural gas production, with an average of almost 103 billion cubic feet per day in the second half of 2023. The decrease in forecast production is attributed to reduced natural gas-directed drilling caused by declining natural gas prices. However, the growth of associated natural gas production in the Permian Basin is expected to offset the declines in dry gas output.
- Natural gas prices: Natural gas prices are predicted to increase throughout the summer due to a decline in production and increased demand for air conditioning. The forecasted Henry Hub spot price is expected to average almost $2.90 per million British thermal units in the second half of 2023 and rise by almost 30% in 2024 to an average of about $3.40 per million British thermal units.
- Electricity generation: The forecast indicates an increase in solar generation capacity in the United States, leading to a 24% higher U.S. solar generation in summer 2023 compared to summer 2022. Lower natural gas prices are expected to contribute to a drop in coal-fired electricity generation.
- Electricity prices: Wholesale electricity prices in the eastern half of the United States are projected to be about 50% lower in 2023 due to lower natural gas prices. However, temporary spikes in wholesale power prices are expected in the Northwest, Southwest, and California regions during peak demand hours, resulting in average monthly prices above $100 per megawatt-hour in July and August.
