|Short-Term Energy Outlook
July 10, 2018
U.S. crude oil production averaged an estimated 10.9 million barrels per day in June 2018, up 100,000 barrels per day from May. The Energy Information Administration (EIA) forecasts total U.S. crude oil production will average 10.8 million barrels a day in 2018 and will average 11.8 million barrels per day in 2019 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.
North Sea Brent crude oil spot prices averaged $74 per barrel in June, a $3 per barrel decrease from the May average. This is the first time monthly Brent crude oil prices have averaged more than $70 per barrel since November 2014. The North Sea Brent crude oil spot price is forecast to average $73 per barrel in the second half of 2018 and $69 per barrel in 2019 compared to an average of $54 per barrel in 2017. The West Texas Intermediate crude oil spot prices are forecast to average $6 per barrel lower than Brent in the second half of 2018 and $7 per barrel lower in 2019.
Gasoline and Diesel Prices
U.S. regular gasoline retail prices averaged $2.89 per gallon in June, 2018, down 1 cent from the average in May. EIA expects that 2018 monthly average gasoline prices peaked in May and forecasts prices to decline gradually in the coming months to an average of $2.83 per gallon in September. EIA expects regular gasoline retail prices to average $2.76 per gallon in 2018 and $2.77 per gallon in 2019.
EIA expects on-highway diesel fuel retail prices to average $3.14 per gallon in 2018 and $3.07 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.