/ Energy / March 2018 Short-Term Energy Outlook

March 2018 Short-Term Energy Outlook

Parul Dubey on March 7, 2018 - in Energy

Dr. Linda Capuano, Administrator of the U.S. Energy Information Administration, issued the following comments on EIA’s March 2018 Short-Term Energy Outlook, which was released on Tuesday:

The full STEO can be downloaded at: http://www.eia.gov/forecasts/steo/
STEO contact: Angelina LaRose, 202-586-6135 (angelina.larose@eia.gov)
Media contact: Jonathan Cogan, 202-586-8719 (jonathan.cogan@eia.gov)

Oil Markets:

“In February, the average Brent crude oil price dropped by $4 to $65 per barrel. EIA’s forecast expects prices to decline gradually, averaging $60 per barrel in the second half of this year. EIA expects annual average Brent crude oil prices to remain near $62 per barrel in both 2018 and 2019, which is lower than prices in recent weeks but is higher than the average in 2017 by less than $8 per barrel.”

“EIA estimates that U.S. crude oil production averaged 10.3 million barrels per day in February, up by 230,000 from the January level, which included some well freeze-offs in the Permian and Bakken. This month, we are reporting that total U.S. crude oil production averaged 9.3 million barrels per day in 2017, ending the year with production at 9.9 million in December.”

“EIA projects that U.S. crude oil production will average 10.7 million barrels per day in 2018, which would mark the highest annual average U.S. crude oil production level, surpassing the previous record of 9.6 million barrels per day set in 1970. EIA forecasts that 2019 crude oil production will average 11.3 million barrels per day.”

“For all of 2018, the forecast expects production to continue hitting new monthly highs—barring any significant energy disruptions. By the end of 2018, the short-term outlook is forecasting a new record average of 10.7 million barrels per day in U.S. crude oil production, and we continue to expect production to average above 11 million barrels per day in 2019.”

Natural Gas:

“Following record high gas inventory withdrawals in early 2018, the short-term outlook estimates that inventories for March 2018 will total 1,481 billion cubic feet, which represents a nearly 28% drop from March 2017. In fact, March 2015 was the last time inventories came close to that level.”

“EIA expects U.S. natural gas production to reach new records in 2018. The forecast suggests that production will near 82 billion cubic feet per day in 2018 and, as a consequence, inventory levels will fully recover from this year’s low levels by next winter.”

Electricity:

“The short-term outlook of utility-scale electricity generation remains relatively unchanged this month. EIA continues to expect natural gas’s share of utility-scale generation to increase from 32% in 2017 to 34% by 2019, and all indications suggest that it will continue to be the primary source for generation over the next 24 months.”

“EIA’s forecast for U.S. retail residential electricity prices will top 13 cents per kilowatthour in March, which marks the highest price since at least 1997 for the month of March. Last year, retail residential electricity prices didn’t pass 13 cents until May, and prices remained below that all of 2016.”

Coal:

“The March short-term outlook maintains EIA’s forecast for reduced U.S. coal production, coinciding with decreased demand for exports. EIA forecasts steam coal exports will drop by 38% in 2018 and by another 10% in 2019.”

Renewables:

“EIA’s forecast expects solar capacity in the electric power sector to climb just above 42 gigawatts in 2019, nearly doubling the 2016 level. From 2017 to 2019, solar electricity generation in all sectors is also forecast to see a marked increase with generation forecast to increase from 211,000 megawatthours per day in 2017 to 294,000 megawatthours per day in 2019.”

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