ElA Cuts Oil Price Estimates, Raises U.S. Natural Gas Price Forecast

The U.S. Energy Information Administration lowered its 2024 estimates for benchmark crude prices by around 4%, citing recent price declines, while raising its estimates for U.S. natural gas prices.

In its monthly Short Term Energy Outlook, the ElA said Tuesday it expects spot Brent to average $84.15 a barrel in 2024, down from its previous forecast of $87.79. West Texas Intermediate is seen averaging $79.70, compared with $83.05 previously.

The agency sees Brent rising to $85 a barrel in the second half of the year, in part as the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, extend voluntary output cuts through the third quarter. OPEC+ said it will begin unwinding some of the additional cuts after September.

“Although crude oil prices initially fell following the OPEC+ announcement, we expect the extension of all voluntary cuts through 3Q24 will cause global oil inventories to continue falling through 1Q25 and put upward pressure on oil.

The ElA increased its 2024 estimate for Henry Hub spot natural gas prices to $2.46 per million British thermal units from $2.18/mmBtu in its previous forecast, citing lower expected production and below-average storage injections over the summer. The ElA projects natural gas in storage to end the injection season on Oct. 31 at 6% above the five-year average.