5 Takeaways From The EIA On Energy Market Volatility

The energy markets continue to be trending toward volatility, according to a new July report from the U.S. Energy Information Administration.

Despite this, the EIA report makes a few conclusions about the near-term future of energy markets.

• The EIA anticipates an increase in electricity sales and generation from renewable energy through 2022, specifically noting that the former will grow by 2.8% in 2021. Electricity sales are linked to the subsiding of the pandemic in the U.S.
• Renewable energy is anticipated to increase to 23% of total electricity outputs in 2022, which is 3% higher than in 2020. Solar and wind are anticipated to carry much of the load.
• Climate change in the form of droughts is anticipated to hit the hydropower industry in the northwest and in California, creating an 11% decrease in electricity from the renewable source in 2021. This may lead to a 12% hit in electricity developed from hydropower nationwide.
• Global consumption of petroleum is anticipated to increase to about 9 million barrels per day from 2020 to 2022. This has a lot to do with the reopening of economies as the pandemic subsides in certain countries.
• The rise in petroleum consumption will help stabilize gas prices to about $2.92 per gallon for the rest of the year in the U.S. and to $2.74 per gallon for 2022.