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U.S. EIA Predicts Energy Use Will Increase and Natural Gas Prices Will Be Lower Than Coal in 2024 & 2025

Last week, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO) that in 2024, natural gas will cost less than coal for the first time in decades, and power consumption will increase in both 2024 and 2025.

If the EIA estimates are correct, investments in oil and natural gas, along with renewables, will need to be prioritized to meet this growing demand.

Natural gas is forecast to average $2.15 per million British thermal units (mmBtu) at the Henry Hub, compared to coal's $2.45. This price shift, stemming from increased natural gas supply, presents a strategic economic advantage for sectors reliant on power generation.

The change in natural gas prices could mean lower production costs and consumer prices for the industrial sector, where energy costs significantly influence operational expenses. This is particularly true for industries like manufacturing and heavy machinery, which have traditionally depended on coal.

Reduced utility costs could lead to lower operational costs for businesses, especially those with high energy demands, such as retail spaces, offices, and service providers.

For more information, contact Sean Wallentine.


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