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Last Updated: May 18, 2021
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Forecast Highlights

Global liquid fuels

  • The May Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve. Economic activity has increased significantly after reaching multiyear lows in the second quarter of 2020. The increase in economic activity and easing of COVID-19-related restrictions have contributed to rising energy use. U.S. gross domestic product (GDP) declined by 3.5% in 2020 from 2019 levels. This STEO assumes U.S. GDP will grow by 6.2% in 2021 and by 4.3% in 2022. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit. Our forecast assumes continuing economic growth and increasing mobility with easing COVID-19-related restrictions, and any developments that would cause deviations from these assumptions would likely cause energy consumption and prices to deviate from our forecast.
  • We completed modeling and analysis for this report before the temporary closure of the Colonial Pipeline on May 7 as a result of a cyberattack. Although effects of the outage are not reflected in this report, we are closely following supply and price developments related to the outage. Updates related to the outage will be reflected in Today in EnergyThis Week in Petroleum, and the Weekly Petroleum Status Report as they become available.
  • Brent crude oil spot prices averaged $65 per barrel (b) in April, unchanged from the average in March. Brent prices were steady in April as market participants considered diverging trends in global COVID-19 cases. In some regions, notably the United States, oil demand is rising as both COVID-19 vaccination rates and economic activity increase. In other regions, notably India, oil demand is declining because of a sharp rise in COVID-19 cases. EIA forecasts that Brent prices will average $65/b in the second quarter of 2021, $61/b during the second half of 2021, and $61/b in 2022.
  • We estimate that the world consumed 96.2 million barrels per day (b/d) of petroleum and liquid fuels in April, an increase of 15.8 million b/d from April 2020 but 4.0 million b/d less than April 2019 levels. We forecast that global consumption of petroleum and liquid fuels will average 97.7 million b/d for all of 2021, which is a 5.4 million b/d increase from 2020. We forecast that consumption of petroleum and liquid fuels will increase by 3.7 million b/d in 2022 to average 101.4 million b/d.
  • We expect that gasoline consumption in the United States will average almost 9.0 million b/d this summer (April–September), which is 1.2 million b/d more than last summer but almost 0.6 million b/d less than summer 2019. We increased our summer gasoline consumption forecast by 0.1 million b/d from last month based on weekly data that suggested more gasoline consumption than we had previously forecast. The increase also reflects IHS Markit’s increased employment forecast. For all of 2021, we forecast that U.S. gasoline consumption will average 8.7 million b/d, which is up from 2020 (8.0 million b/d) but down from 2019 (9.3 million b/d).
  • According to our most recent data, U.S. crude oil production averaged 9.9 million b/d in February 2021, which was down by 1.2 million b/d from January. In February, cold temperatures caused significant declines in crude oil production in Texas, as well as smaller declines in other states. We estimate that production outages were generally limited to February and that U.S. crude oil production rose to 10.9 million b/d in March and to almost 11.0 million b/d in April. Because the average price of West Texas Intermediate crude oil remains above $55/b in our forecast, we expect producers will drill and complete enough wells in the coming months to offset declines at existing wells. In addition, new projects in the Federal Offshore Gulf of Mexico contribute to rising production in the forecast. U.S. crude oil production in the forecast averages 11.3 million b/d in the fourth quarter of 2021 and then rises to average 11.8 million b/d in 2022.

Natural Gas

  • In April, the natural gas spot price at Henry Hub averaged $2.66 per million British thermal units (MMBtu), which is slightly higher than the March average of $2.62/MMBtu. We expect the Henry Hub spot price will average $2.78/MMBtu in the second quarter of 2021 and will average $3.05/MMBtu for all of 2021, which is up from the 2020 average of $2.03/MMBtu. We expect natural gas prices will rise this year, primarily as a result of two factors: growth in liquefied natural gas (LNG) exports and rising domestic natural gas consumption in the residential, commercial, and industrial sectors. In 2022, we expect the Henry Hub price will fall to an average $3.02/MMBtu amid slowing growth in LNG exports and rising production.
  • We expect that U.S. consumption of natural gas will average 82.6 billion cubic feet per day (Bcf/d) in 2021, down 0.7% from 2020. U.S. natural gas consumption declines in the forecast, in part, because electric power generators switch to coal from natural as a result of rising natural gas prices. In 2021, we expect residential and commercial natural gas consumption together will rise by 1.0 Bcf/d from 2020 and industrial consumption will rise by 0.8 Bcf/d from 2020. Rising consumption outside of the power sector results from expanding economic activity and colder temperatures in 2021 compared with 2020. We expect U.S. natural gas consumption will average 82.5 Bcf/d in 2022.
  • We estimate that natural gas inventories ended April 2021 at almost 2.0 trillion cubic feet (Tcf), which is 3% lower than the five-year (2016–20) average. Natural gas withdrawals from storage during the winter of 2020–21 were higher than the five-year average, largely as a result of the cold February temperatures that contributed to a drop in natural gas production. We forecast that natural gas inventories will end the 2021 injection season (end of October) at more than 3.6 Tcf, which is 3% below the five-year average.
  • We forecast that U.S. production of dry natural gas will average 91.1 Bcf/d in 2021, which is down 0.3% from 2020. Dry natural gas production fell by 6.0 Bcf/d in February to 86.3 Bcf/d because of cold weather that largely affected Texas. We estimate production increased to 91.3 Bcf/d in March. We expect relatively flat dry natural gas production in May ahead of production beginning to rise in mid-2021. We forecast dry natural gas production will reach 92.0 Bcf/d in the fourth quarter of 2021 and average 93.1 Bcf/d in 2022. The increase in production reflects sustained higher forecast prices for natural gas and crude oil compared with 2020.
  • U.S. LNG exports set an all-time record in March 2021 at 10.5 Bcf/d and averaged 9.2 Bcf/d in April—the most exported LNG for those months since the United States began exporting it in 2016. Throughout 2020 and in January 2021, more than half of U.S. LNG exports went to Asia. However, in February and March 2021, more than half of U.S. LNG exports went to Europe as a result of spot natural gas prices in Europe reaching levels similar to spot natural gas prices in Asia. For May, we forecast a decline in U.S. LNG exports to 8.6 Bcf/d (more than 90% of baseload export capacity utilization) before exports rise above 9.0 Bcf/d in the summer months to meet summer peak demand in Europe and Asia. We expect LNG exports will average 9.2 Bcf/d in both 2021 and 2022, up from 6.5 Bcf/d in 2020. Flat LNG exports in 2022 reflect our expectation that limited new export capacity will come online during the forecast period.

U.S. natural gas prices


Electricity, coal, renewables, and emissions

  • We forecast that electricity consumption in the United States will increase by 2.2% in 2021 after falling 3.9% in 2020. We forecast electricity sales to the industrial sector will grow by 3.3% in 2021. We forecast that retail electricity sales to the residential sector will grow by 2.9% in 2021, which is primarily a result of colder temperatures in the first quarter of 2021 compared with the same period in 2020. We expect retail electricity sales to the commercial sector will increase by 1.4% in 2021. Much of the increased electricity consumption across the sectors reflects improving economic conditions in 2021. For 2022, we forecast that U.S. electricity consumption will grow by another 1.0%.


World liquid fuels production and consumption balance


Natural gas Nat gas STEO Short Term Energy Outlook electricity EIA Market Oil and Gas industry Oil and Gas Companies liquid fuels
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What & Where Is Propane Bullet Tank Used?


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Buy Liquid Nitrogen Cylinder in the UAE from GasNtools and improve the display of your frozen items!

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