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The EIA expects record oil consumption by 2024

Updated: Apr 27, 2023

In its January Short-Term Energy Outlook (STEO) report, the US Energy Information Administration (EIA) expects a rebound in global consumption of liquid fuels such as gasoline, diesel and gasoline for aircraft, exceeding 100 million barrels per day on average in 2023 and 102 million barrels per day in 2024.

Despite this increase, the price of crude oil is expected to decrease ($80 per barrel for Brent forecast in 2024), largely due to the growth in crude oil production in the United States and abroad.

"Our forecast for global oil consumption depends on uncertain economic conditions, especially in China," said EIA Administrator Joe DeCarolis.

"How China's economy changes following its reopening from pandemic lockdowns could have a significant impact on global consumption of petroleum products."

STEO presents, in addition to the oil consumption forecast, energy price forecasts.

The EIA forecasts that US gasoline prices will average around $3.30 per gallon in 2023 and $3.10 per gallon in 2024.

Natural gas is also expected to fall in price in the United States in the coming years as domestic production continues to grow, even though liquefied natural gas exports are expected to increase, as global demand continues to grow and more U.S. LNG facilities come online.

US electricity generated from coal is expected to decline from 20% in 2022 to 18% in 2023 and then to 17% in 2024 as electricity generation from renewables continues to rise.

The relevance of LNG

The United States is currently one of the world's largest producers of natural gas, thanks to the abundance of shale gas reserves and the development of hydraulic fracturing technology.

The increased production of natural gas has led to a surplus in the domestic market, leading to the exploration of exporting liquefied natural gas (LNG) to foreign markets, including Europe.

The process of liquefying natural gas involves cooling it to -162 degrees Celsius, reducing its volume to 1/600th of its original size, making it easier and more cost-effective to transport by tanker ships.

The US has increased its LNG export capacity in recent years, and as of 2021, it is the third-largest LNG exporter in the world, after Qatar and Australia.

Europe is highly dependent on natural gas imports to meet its energy needs, and this dependence is expected to increase in the coming years as the region seeks to transition to a low-carbon economy.

The use of natural gas as a bridging fuel to replace coal-fired power generation is expected to rise in the short to medium term, given the intermittent nature of renewable energy sources.

The US has already become a significant supplier of LNG to Europe, with major buyers including Spain, Portugal, Italy, Turkey, and the UK.

In conclusion, the US natural gas production has a crucial role in the growth of the LNG business, enabling the export of liquefied natural gas to meet the energy demands in Europe. This helps to diversify Europe's sources of natural gas and improve its energy security.

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