RoydadNaft –  The price of crude oil, natural gas, and gasoline has dropped more than 10% in recent weeks, but the U.S. Energy Information Administration (EIA) believes higher prices are in the future even though several economic indicators create questions.

West Texas Intermediate crude has declined 13% since November 2022 to average $80 per barrel so far in November compared to $92 last year, according to EIA. WTI closed at $75.65 on Wednesday.

The national average for retail gasoline has followed suit declining from $3.804 per gallon in November 2022 to $3.405 this week, which is an 11% decline, according to AAA. The average price in Texas this week was $2.871, which is 10% less than last year. Many locations across Texas reported retail gasoline prices as low as $2.61 on Wednesday.

“We forecast the Brent crude oil price will increase from an average of $90 per barrel (b) in the fourth quarter of 2023 to an average of $93/b in 2024,” EIA said its Short-Term Energy Forecast released this week.

EIA believes U.S. gasoline consumption declines by 1% in 2024, which would result in the lowest per capita gasoline consumption in two decades. “An increase in remote work in the United States, improvements in the fuel efficiency of the U.S. vehicle fleet, high gasoline prices, and persistently high inflation have reduced per capita gasoline demand,” EIA stated.

However, the record oil and natural gas production in the U.S. this year has created large inventories and EIA projects the records being set in 2023 will be broken in 2024. When supplies out pace demand prices will drop.

Alex Mills is the former President of the Texas Alliance of Energy Producers.