Crude oil and natural gas prices remained stable in early September. However, the U.S. Energy Information Administration (EIA) anticipates that these prices will increase by the end of the year.
On the New York Mercantile Exchange, crude oil prices briefly dipped below $70 per barrel but rebounded to $73 on September 19.
The EIA noted in its Short-Term Energy Forecast, “More oil will be drawn from inventories in the fourth quarter of 2024 than we previously expected because OPEC+ has announced a delay in production increases until December.”
Despite rising market concerns about economic growth and oil demand, especially in China, which have contributed to falling oil prices, OPEC+ production cuts mean that less oil is being produced globally than is being consumed. The EIA predicts that the average price of Brent crude oil will be around $82 per barrel in the fourth quarter of 2024.
The EIA also forecasted that natural gas prices will remain stable during the shoulder season of September and October, but will rise towards the end of 2025. These price increases are expected due to U.S. natural gas production not keeping pace with the growth in liquefied natural gas (LNG) exports. The EIA expects the Henry Hub spot price to increase from under $2.00 per million British thermal units (MMBtu) in August to approximately $3.10/MMBtu next year.
In related news, industry representatives criticized the Biden administration’s moratorium on new LNG export permits. Mike Wirth, CEO of Chevron Corp., urged the administration to lift the pause, calling the policy a failure that prioritizes politics over progress.
Wirth stated that the moratorium, which began earlier this year, would raise energy costs, jeopardize supplies for U.S. allies in Europe, and hinder efforts to reduce emissions by slowing the transition from coal to natural gas. He made these comments during a speech at the GasTech conference in Houston on September 17.
He said, “When it comes to advancing economic prosperity, energy security, and environmental protection, an LNG permitting pause fails on all three. The administration should stop the attacks on natural gas and embrace the benefits it’s already delivering worldwide.”
In January, the White House suspended new licenses for LNG exports, citing the need for closer examination of the environmental and national security impacts of these shipments. This decision caused a significant stir in the industry, jeopardizing a construction boom at terminals along the Gulf Coast that had made the U.S. the world’s largest exporter of the super-chilled fuel.
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