According to the latest forecast from the U.S. Energy Information Administration (EIA), residential electricity prices in the U.S. are expected to rise by about 1% in 2024. This would be the slowest annual growth rate since 2020.
The EIA notes that falling natural gas prices, which have been decreasing since late 2023, are contributing to this slower rate of increase. Since natural gas is the primary source for U.S. electricity generation, its lower costs are influencing retail electricity rates.
In contrast, the EIA predicts that Brent crude oil prices could climb to around $87 per barrel by the end of the year, up from the current level of under $80 per barrel. This increase is attributed to expected oil production cuts by OPEC+ and a reduction in global oil inventories, which are likely to push prices higher.
EIA Administrator Joe DeCarolis highlighted a silver lining for consumers. “Even with the anticipated rise in oil prices, gasoline prices are expected to stay lower than they were in 2023,” he said in a news release. He attributed this to a decrease in gasoline consumption by U.S. motorists since the pandemic, which should help prevent significant increases in gasoline prices.
Other key points from the EIA’s August Short-Term Energy Outlook include:
Natural Gas: The EIA forecasts a 2% decrease in natural gas consumption for electricity generation in August compared to July, as temperatures return to normal and cooling demand lessens. July saw record-high natural gas consumption for electricity generation in the U.S., partly due to Hurricane Beryl, which disrupted power in Texas.
Jet Fuel: The EIA expects U.S. jet fuel consumption to surpass pre-pandemic levels by 2025. This increase will mainly be driven by commercial air travel, influenced by economic conditions, employment rates, and air travel costs. However, potential disruptions include issues with aircraft supply chains and air traffic controller shortages.