The U.S. Energy Information Administration (“EIA”) released its Short-Term Energy Outlook (“STEO”) yesterday for the month of May – the forecast highlights can be found here and the full report can be found here.
Here are a few of the main takeaways from the May STEO forecasts:
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Crude Oil – the recent drop in prices may continue:
According to the petroleum and natural gas markets review portion of the May STEO:
“Expectations of supply growth in 2017, particularly in the United States, as well as concerns that a potential extension of the [OPEC crude oil production cut] agreement will not reduce global inventories as quickly as expected contributed to a sharp drop in crude oil prices in the first week in May.”
“EIA projects that the global crude oil market in 2017 and 2018 will have more supply growth compared with the April STEO, resulting in a lower forecast of crude oil prices in the coming months.”
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Coal – increased demand predicted:
According to the EIA’s Forecast Highlights regarding coal in the May STEO:
“EIA expects growth in demand for U.S. coal exports to contribute to a 5% increase in coal production in 2017.”
According to the EIA’s Notable Forecast Changes:
“EIA forecasts coal exports to average 63 million short tons (MMst) in 2017 and 60 MMst in 2018, these are 5% and 14% higher, respectively, than forecast in the April STEO. The export forecast is higher than last month because of slightly lower expected domestic use of coal for electricity generation and because of higher assumed global coal prices.”
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Wind – capacity expected to rise:
According to the EIA’s Notable Forecast Changes:
“This month’s STEO forecast for wind power capacity in 2018 is 7% higher than in the April STEO because of new information about planned capacity additions. Wind capacity is now projected to rise from 88 GW in 2017 to 102 GW in 2018, an increase of 16%.”
Only time will tell if these forecasts will come to fruition – stay tuned.
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