The US Energy Information Administration expects the benchmark Henry Hub spot price to average about $2.25 per million British thermal units (MMBtu) in 2024, a 10% decrease from 2023 and a 65% decrease from 2022. In its March ‘Short term energy outlook’ (STEO), EIA forecasts that US natural gas inventories will be more than 30% higher than average at the end of the winter season following relatively low winter demand.

According to EIA’s forecast, low natural gas prices will slightly decrease domestic natural gas production in 2024 compared with record production last year.

"Some producers have announced curtailments in production or reductions in upstream spending on natural gas-directed activities this year," said EIA administrator Joe DeCarolis. "But with so much domestic natural gas production tied to growing crude oil production, we expect natural gas production to decrease far more slowly than prices have."

EIA expects US crude oil production to continue growing in 2024 and 2025, with both years exceeding the production record set in 2023. Growth in US crude oil production should help offset the effects of continued voluntary OPEC+ oil (that is, crude oil plus lease condensate) production cuts announced recently, but EIA still expects a tight balance of global oil production and demand, which EIA forecasts will lead to higher Brent crude oil prices in 2024 than expected at the start of the year.

“Some significant sources of uncertainty remain in our crude oil forecasts, including how the Red Sea conflict could affect production and how strictly OPEC+ members will adhere to their voluntary production cuts,” DeCarolis said.

Other highlights from the March STEO include:

  • Solar. EIA expects utility-scale solar generation to provide 6% of US electricity generation in 2024, up from 4% in 2023. Expected growth in solar generation is supported by a 36 GW increase in solar generating capacity.
  • Coal markets. EIA forecasts that US coal exports will increase 1% in 2024 and a further 5% in 2025, as coal consumption by the power sector continues to decrease.

The full March 2024 ‘Short-Term Energy Outlook’ is available on the EIA website.