EIA Releases April's Short-Term Energy Outlook
EIA Acting Administrator, Steve Nalley, issued the following comments about the April 2021 Short-Term Energy Outlook (STEO).
Summer fuels outlook
"EIA's April Short-Term Energy Outlook forecasts that regular-grade retail gasoline prices will average $2.78 per gallon this summer in the United States, up from $2.07 per gallon during the summer of 2020. The higher price in 2021 results from our forecasts of higher crude oil prices this summer and greater gasoline demand as the effects of the COVID-19 pandemic continue to subside and travel increases."
"EIA expects gasoline consumption in the United States to increase this summer compared with last summer, but it won't return to 2019 levels this summer. We forecast 15% more highway travel this summer as a result of rising employment, easing regional restrictions designed to slow the pandemic, and increasing overall economic activity as vaccination rates increase."
"EIA believes that households in the United States will increase their spending on motor gasoline by about 31% this summer due to increased travel as the pandemic subsides and higher gasoline prices. Still, households could see a wide range of increased expenditures, depending on employment levels, work-from-home policies, and other factors."
"During the summer of 2020, consumers in the United States used the least distillate fuel (which includes diesel fuel and heating oil) since 2009. EIA expects that U.S. consumption of distillate fuel will increase by 11% this summer, nearly returning to the 2019 level. "
Liquid fuels
"As economic activity recovers and petroleum consumption rises globally, EIA expects international benchmark Brent crude oil prices to average $64 per barrel this summer, up from $36 per barrel last summer. Production restraint on the part of OPEC and its partner countries also contributes to our price expectation."
"EIA estimates that worldwide consumption of petroleum and liquid fuels will grow by 6% in 2021 and an additional 4% in 2022. We forecast that the world's oil consumption next year will grow and reach levels from 2019."
Natural Gas
"Cold weather and market disruptions in February resulted in U.S. benchmark Henry Hub natural gas spot prices averaging $5.35 per million British thermal units. In March, the average price dropped to $2.62 per million British thermal units."
"EIA expects that consumption of natural gas will decrease in the United States in 2021 by less than 1%. Although we expect that natural gas consumption in residences, by commercial establishments, and by industry will all increase, the slight decrease in overall consumption in 2021 is the result of less consumption used to generate power because of higher natural gas prices."
Coal
"EIA forecasts that coal production will increase by 9% in the United States in 2021 and by 3% in 2022. This forecast increase is a result of our expectation of a 13% rise in coal use for power generation in 2021 and a further 4% increase in 2022. We expect coal use to increase, primarily because of our forecast of higher natural gas prices, which make coal more competitive as a fuel in the power sector."
Electricity
"Colder temperatures in the first quarter of 2021 along with expectations of continuing economic growth contribute to EIA's forecast 2.1% increase in U.S. electricity consumption in 2021."
"EIA expects the fuel mix for the U.S. power sector to shift in 2021. Our April STEO forecasts that natural gas will fuel about 36% of utility-scale electricity generation, which is down 3% from 2020. Coal's share of power generation increases from 20% in 2020 to 22% in 2021, while generation from renewables increases from 20% to 21%. We expect the nuclear share of U.S. generation to decline from 21% to 20% over the same period."
Emissions
"EIA estimates that energy-related CO2 emissions decreased by 11% in the United States in 2020 because of economic contraction resulting from the COVID-19 pandemic. In 2021, we forecast energy-related CO2 emissions will increase by about 5% as economic activity increases and coal accounts for a larger share of the electric generation market, displacing higher-priced natural gas. We also expect energy-related CO2 emissions to rise in 2022 but by a slower rate of 2%."
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