It’s one of those “good news” “bad news” type of situations when it comes to what the U.S. Energy Information Administration predicts about electricity prices.
On the one hand, the EIA came out this week with a prediction that U.S. residential electricity prices will increase by about 1% in 2024. That’s the bad news, but then, based on utlity rate hikes in Oklahoma, most consumers already knew that, didn’t they?
The good news? The EIA says the 1% inrease will also be “the slowest rate of year-over-year growth since 2020.”
Natural gas prices have been falling since late 2023, and those lower prices are now being factored into retail electricity rates. Natural gas provides the largest share of U.S. electricity generation.
Conversely, EIA forecasts that the Brent crude oil price could increase to about $87 per barrel by the end of the year, according to the agency’s August Short-Term Energy Outlook (STEO). The Brent crude oil price is currently below $80 per barrel. EIA expects that continued oil production cuts from OPEC+ will reduce global oil inventories through the first quarter of 2025, which is likely to push oil prices up.
“The good news from a consumer perspective is that even though we expect oil prices to increase, we expect gasoline prices through this year and next year to remain lower than they were in 2023,” said EIA Administrator Joe DeCarolis. “U.S. motorists are using less gasoline than they did before the pandemic, and we expect that to help keep gasoline prices from climbing with oil prices.”
Source: EIA release