|Short-Term Energy Outlook
May 8, 2018
U.S. crude oil production averaged an estimated 10.5 million barrels per day in April 2018, up 120,000 barrels per day from March. The Energy Information Administration (EIA) forecasts total U.S. crude oil production will average 10.7 million barrels a day in 2018 and will average 11.9 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. EIA forecasts U.S. crude oil production will end 2019 at more than 12 million barrels per day.
North Sea Brent crude oil spot prices averaged $72 per barrel in April, a $6 per barrel increase from the March average and 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 $71 per barrel in 2018 and $66 per barrel in 2019 compared to an average of $54 per barrel in 2017. The West Texas Intermediate crude oil spot prices are forcast to average $5 per barrel lower than Brent in 2018 and 2019.
Gasoline and Diesel Prices
U.S. regular gasoline retail prices are expected to average $2.90 per gallon in the April-September, 2018 driving season, up 17 cents per gallon from April's estimate and up from an average of $2.41 per gallon last summer. For 2018, EIA expects gasoline prices to average $2.79 per gallon. Monthly average gasoline prices are forecast to reach a summer peak of $2.97 per gallon in June, before falling to $2.86 per gallon in September.
EIA expects on-highway diesel fuel retail prices to average $3.12 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.