|Short-Term Energy Outlook
January 15, 2018
U.S. crude oil production averaged 10.9 million barrels per day in 2018, up 1.6 million barrels per day from 2017, reaching its highest level and seeing its largest volume growth on record. The Energy Information Administration (EIA) forecasts total U.S. crude oil production will average 12.1 million barrels per day in 2019 and average 12.9 million barrels per day in 2020.
North Sea Brent crude oil spot prices will average $61 per barrel in 2019, and $65 per barrel in 2020. West Texas Intermediate crude oil spot prices are forecast to average $8 per barrel lower than Brent in the first quarter of 2019 before the discount gradually falls to $4 per barrel in the fourth quarter of 2019 and throughout 2020.
Gasoline and Diesel Prices
U.S. regular gasoline retail prices will average $2.47 per gallon in 2019 and $2.62 per gallon in 2020 in EIA’s forecast, which would be a decrease from an average of $2.73 per gallon in 2018.
The peak price of $4.10 per gallon for gasoline in Nebraska was reached on July 15, 2008.
EIA expects on-highway diesel fuel retail prices to average $2.94 per gallon for 2019 and $3.13 per gallon in 2020. U.S. on-highway diesel retail prices averaged $3.12 per gallon in December, 18 cents lower than November, 2018 prices. EIA forecasts diesel prices to fall to $2.90 per gallon in January.
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.