|Short-Term Energy Outlook
January 9, 2018
U.S. crude oil production averaged an estimated 9.3 million barrels per day in 2017 and is estimated to have averaged 9.9 million barrels per day in December. The Energy Information Administration (EIA) forecasts total U.S. crude oil production to average 10.3 million barrels per day in 2018, which would mark the highest annual average production in U.S. history, surpassing the previous record of 9.6 million barrels per day set in 1970. EIA forecasts production to increase to an average of 10.8 million barrels per day in 2019 and to surpass 11 million barrels per day in November 2019.
North Sea Brent crude oil spot prices averaged $64 per barrel in December, an almost $2 per barrel increase from the November average and the highest monthly average since November 2014. The North Sea Brent crude oil spot price is forecast to average $54 per barrel in 2017, $60 per barrel in 2018 and $61 per barrel in 2019. The West Texas Intermediate crude oil spot prices are forcast to average $4 per barrel lower than Brent in 2018 and 2019.
Gasoline and Diesel Prices
U.S. regular gasoline retail prices averaged $2.48 per gallon in December, down 9 cents per gallon from November but 22 cents higher than last year. U.S. regular gasoline retail prices averaged $2.42 per gallon in 2017 and are forecast to average $2.57 per gallon in 2018 and $2.58 per gallon in 2019.
The Energy Information Administration expects on-highway diesel fuel retail prices, which have averaged $2.65 per gallon in 2017, will average $2.95 per gallon in 2018 and $3.01 in 2019.
The peak price of $4.10 per gallon for gasoline in Nebraska was reached on July 15, 2008.
The peak price of $4.77 per gallon for diesel in Nebraska was reached on July 17, 2008.
Because taxes and retail distribution costs are generally stable, movements in gasoline and diesel prices are driven primarily by changes in crude oil prices and wholesale margins. Crude oil prices that differ from the forecast would be reflected in the price of motor fuels. Each dollar per barrel of sustained change in crude oil prices relative to the forecast translates into approximately a 2.4 cent-per-gallon change in product prices.