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Short-Term Energy Outlook

Release Date: Oct. 13, 2021  |  Forecast Completed: Oct. 7, 2021  |  Next Release Date: Nov. 9, 2021  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Prices

  • Brent crude oil spot prices averaged $74 per barrel (b) in September, up $4/b from August and up $34/b from September 2020. Brent spot prices have risen from their September average to more than $80/b in early October. Oil prices have increased over the past year as result of steady draws on global oil inventories, which averaged 1.9 million barrels per day (b/d) during the first three quarters of 2021. In addition to sustained inventory draws, prices increased after the October 4 announcement by OPEC+ that the group would keep current production targets unchanged.
  • We expect Brent prices will remain near current levels for the remainder of 2021, averaging $81/b during the fourth quarter of 2021, which is $10/b higher than our previous forecast. The higher forecast reflects our expectation that global oil inventories will fall at a faster rate than we had previously expected owing largely to lower global oil supply in late 2021 across a range of producers. In 2022, we expect that growth in production from OPEC+, U.S. tight oil, and other non-OPEC countries will outpace slowing growth in global oil consumption and contribute to Brent prices declining from current levels to an annual average of $72/b.
  • U.S. regular gasoline retail prices averaged $3.18 per gallon (gal) in September, up 2 cents/gal from August and almost $1/gal higher than in September 2020. Recent gasoline price increases reflect increasing crude oil prices outweighing falling gasoline wholesale margins. We forecast that retail gasoline prices will average $3.21/gal in October before falling to $3.05/gal in December.
  • In September, the natural gas spot price at Henry Hub averaged $5.16 per million British thermal units (MMBtu), which was up from the August average of $4.07/MMBtu and up from an average of $3.25/MMBtu in the first half of 2021. The rising prices in recent months reflect U.S. natural gas inventory levels that are below the five-year average and continuing demand for natural gas for power generation use at relatively high prices.
  • We expect the Henry Hub spot price will average $5.80/MMBtu in fourth-quarter 2021, which is $1.80/MMBtu higher than we forecast in the September STEO. In the current forecast, Henry Hub prices reach a monthly average peak of $5.90/MMBtu in January and generally decline through 2022, averaging $4.01/MMBtu for the year amid rising U.S. natural gas production and slowing growth in LNG exports. We raised our Henry Hub price forecast through the end of 2022 compared with last month. The increase reflects a higher starting point for our price forecast that incorporates recent developments in U.S. and global natural gas markets. We forecast that U.S. inventory draws will be slightly more than the five-year average this winter, and we expect that factor, along with rising U.S. natural gas exports and relatively flat production through January will keep U.S. natural gas prices near recent levels before downward pressures emerge. Given low natural gas inventories in both U.S. and European natural gas storage facilities and uncertainty around seasonal demand, we expect natural gas prices to remain volatile over the coming months, with winter temperatures being a key driver of demand and prices.

West Texas Intermediate (WTI) crude oil price

U.S. diesel fuel and crude oil prices

Henry Hub natural gas price

U.S. residential electricity prices

Prices
  2019202020212022
aWest Texas Intermediate.
bAverage regular pump price.
cOn-highway retail.
dU.S. Residential average.
eElectric power generation fuel cost.
WTI Crude Oila
(dollars per barrel)
56.9939.1768.4868.24
Brent Crude Oil
(dollars per barrel)
64.3441.6971.3871.91
Gasolineb
(dollars testper gallon)
2.602.182.972.90
Dieselc
(dollars per gallon)
3.062.563.243.23
Heating Oild
(dollars per gallon)
3.002.443.003.12
Natural Gasd
(dollars per thousand cubic feet)
10.4610.7612.1012.95
Electricityd
(cents per kilowatthour)
13.0113.2013.6414.10
Coale
(dollars per million Btu)
2.021.921.972.01

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Related Figures
West Texas Intermediate (WTI) crude oil price XLSX PNG
U.S. gasoline and crude oil prices XLSX PNG
U.S. diesel fuel and crude oil prices XLSX PNG
Henry Hub natural gas price XLSX PNG
U.S. natural gas prices XLSX PNG
U.S. residential electricity price XLSX PNG
U.S. census regions and census divisions XLSX PNG
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