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Email Content: Poultry Industry News, Comments and more by Simon M. Shane

October 2020 Short-Term Energy Outlook


The Energy Information Agency released the October Short-Term Energy Outlook on October 5th.  According to Dr. Linda Capuano COVID has shifted energy consumption from offices and malls to homes with implications for the coming winter.  Due to the LaNina event, it is anticipated that winter temperatures will be lower than normal resulting in demand for home heating. Currently natural gas storage is at a record high at approximately four trillion cubic feet but will decline by the end of March 2021 to a figure six percent lower than the five-year average.  An anticipated two percent decline in natural gas prices will be offset by an eight percent increase in consumption over winter resulting in increased expenditure by homeowners.


The EIA anticipates that liquid fuels will stabilize but with high inventory levels and pressure on oil prices.  The EIA anticipates a monthly Brent spot price of $42 per barrel during the fourth quarter of 2020.  U.S. crude oil production rose to 11.2 million barrels per day in September up 1.2 million barrels from May, representing a 40-month low.  Natural gas prices will increase to $3.38 per million BTU in January 2021 with average prices for the coming year approximately $1 per million BTU higher than in 2020.


Coal production in 2020 will be 26 percent lower than in 2019 due to competition from natural gas.  The decline in mining activity has less to do with EPA and OSHA that it is to do with straightforward price competition.  As natural gas prices rise in 2021, demand for coal will increase with production anticipated to rise by 19 percent.


Copyright © 2020 Simon M. Shane