Notable Forecast Changes

• Because of the rapidly changing situation in energy markets, the U.S. Energy Information Administration’s (EIA) current forecast includes a significant number of notable forecast changes. You can find more information in the detailed table of forecast changes.

• The macroeconomic forecast EIA used for this STEO assumes U.S. gross domestic product (GDP) declines by 4.8% in 2020 compared with an assumed decline of 6.1% in the August STEO. EIA also assumes a smaller increase in GDP in 2021 of 3.1%, compared with 3.7% growth assumed in the previous forecast. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit.

• EIA expects global consumption of petroleum and other liquid fuels will average 99.6 million barrels per day (b/d) in 2021, a reduction of 0.6 million b/d from the August STEO. The downward revision primarily reflects lower expected growth in China, where EIA forecasts liquid fuels consumption to rise by 1.0 million b/d in 2021 to average 15.0 million b/d. The revised petroleum consumption reflects a more plausible assessment of the country’s energy intensity of economic growth.

• Recently released EIA data show that U.S. crude oil production for June was 10.4 million b/d, 0.7 million b/d more than estimated in last month’s STEO forecast. The higher-than-expected production indicates a faster return of curtailed production than previously assumed. Despite the higher realized production levels, EIA’s forecast for U.S. crude oil production for the fourth quarter of 2020 and 2021 is relatively unchanged.

• EIA forecasts U.S. dry natural gas production will average 86.6 billion cubic feet per day (Bcf/d) in 2021, which is 2.6 Bcf/d (3%) higher than forecast in the August STEO. The higher forecast largely reflects higher expected natural gas prices in the second half of 2020 because prices typically affect production with a lag.

• EIA expects Henry Hub natural gas spot prices to average $2.52 per million British thermal units (MMBtu) in the second half of 2020, compared with $2.26/MMBtu forecast in last month’s STEO. The higher prices reflect an increase in demand for natural gas for use in power generation during a relatively hot August and also an increase in demand for U.S. exports of liquefied natural gas.

• EIA forecasts U.S. production of coal will total 600 MMst in 2021, which is 36 MMst (6%) higher than forecast in the August STEO. The higher forecast reflects higher expected natural gas prices in 2021 that will make coal more competitive in the U.S. electric power sector.