|Short-Term Energy Outlook
November 7, 2017
U.S. crude oil production is estimated to have averaged 9.3 million barrels per day in October, down about 90,000 barrels per day from the September level. Crude oil production in the Gulf of Mexico increased to a monthly average of 1.4 million barrels per day in October, down by 260,000 barrels per day from the September level. At the time of publication, many oil production platforms in the Gulf of Mexico had returned to operation. The Energy Information Administration forecasts total U.S. crude oil production to average 9.2 million barrels per day for all of 2017 and 9.9 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.
North Sea Brent crude oil spot prices averaged $58 per barrel in October, $1 per barrel higher than the September average. The North Sea Brent crude oil spot price is forecast to average $53 per barrel in 2017 and $56 per barrel in 2018. The West Texas Intermediate crude oil spot price is expected to average $2 less per barrel than 2017 Brent prices and $5 less per barrel than 2018 Brent prices.
Gasoline and Diesel Prices
U.S. regular gasoline retail prices averaged $2.51 per gallon in October, a decrease of 14 cents per gallon from September. The Energy Information Administration forecasts regular gasoline retail price will average $2.47 per gallon in November and fall to $2.39 per gallon by December. EIA forecasts that U.S. regular gasoline retail prices will average $2.40 per gallon in 2017 and $2.45 per gallon in 2018.
The Energy Information Administration expects on-highway diesel fuel retail prices, which has averaged $2.65 per gallon so far in 2017, will average $2.83 per gallon in 2018.
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.