Demand for crude oil and natural gas in the U.S. and globally continued to rise to record levels in the first half of 2024, and producers in Texas and across the country struggled to keep up with consumer demand.
At the international level, the Organization of Petroleum Countries expects demand to increase by 2 million barrels per day to 106 million barrels per day.
The Energy Information Administration forecasts that global consumption will rise by 1.1 million barrels per day this year.
The EIA expects crude oil prices to rise in the second half of the year.
“The spot price for Brent crude oil ended July at $81 per barrel, compared to a monthly average of $85 per barrel,” the EIA said in its Short-Term Energy Outlook published on Tuesday. “We expect the Brent price to rise again to between $85 and $90 per barrel by year-end.”
The EIA based its forecast on falling global oil inventories, which are expected to fall by 0.4 million barrels per day in the first half of this year and 0.6 million barrels per day in the second half.
Production of crude oil and natural gas in Texas, particularly in the Permian Basin, is hitting new records month after month, making it difficult to transport all the commodity from West Texas to refineries and shipping terminals on the Gulf Coast.
The oversupply has resulted in crude oil prices at the relevant deposit being up to 10 percent below the Brent price and natural gas prices at the West Texas Waha Hub falling below zero several times this year.
The EIA forecasts that natural gas consumption will decline 2% in August compared to July.
“Due to declining consumption and stagnant production, we expect the Henry Hub price to remain relatively low, below $2.50 per million British thermal units through October,” the EIA said.
“However, we expect seasonal increases in space heating consumption as well as an increase in liquefied natural gas (LNG) exports from new plants in Texas and Louisiana to drive the Henry Hub price to an average of about $3.10 from November to March,” the agency said.
Alex Mills is the former president of the Texas Alliance of Energy Producers.
