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Short-Term Energy Outlook

Release Date: March 10, 2015  |  Next Release Date: April 7, 2015  |  Full Report    |   Text Only   |   All Tables   |   All Figures


  • North Sea Brent crude oil prices averaged $58/barrel (bbl) in February, an increase of $10/bbl from the January average, and the first monthly average price increase since June 2014. The price increase reflects news of falling U.S. crude oil rig counts and announced reductions in capital expenditures by major oil companies, along with lower-than-expected Iraqi crude oil exports.
  • EIA forecasts that Brent crude oil prices will average $59/bbl in 2015, $2/bbl higher than projected in last month's STEO, and $75/bbl in 2016. West Texas Intermediate (WTI) prices in 2015 and 2016 are expected to average $7/bbl and $5/bbl, respectively, below Brent. The Brent-WTI spread for 2015 is more than twice the projection in last month's STEO, reflecting continuing large builds in U.S. crude oil inventories, including at the Cushing, Oklahoma storage hub.
  • The current values of futures and options contracts continue to suggest very high uncertainty in the oil price outlook (Market Prices and Uncertainty Report). Although WTI futures contracts for June 2015 delivery traded during the five-day period ending March 5 averaged $54/bbl, the market's expectations (at the 95% confidence interval) for monthly average WTI prices in June 2015 range from $33/bbl to $81/bbl. The band widens over time, with lower and upper limits of $32/bbl and $108/bbl for the broadly held December 2015 contract.
  • Total U.S. crude oil production was estimated to average 9.4 million barrels per day (bbl/d) in February. Given EIA's price forecast, projected total crude oil production averages 9.3 million bbl/d in 2015 and 9.5 million bbl/d in 2016, close to the 9.6 million bbl/d highest annual average level of U.S. production in 1970.
  • U.S. average regular gasoline retail prices increased for the sixth consecutive week from $2.04/gallon (gal) on January 26 to $2.49/gal on March 9, reflecting rising crude oil prices and several outages at West Coast refineries. EIA expects U.S. regular gasoline retail prices, which averaged $3.36/gal in 2014, to average $2.39/gal in 2015, an increase of $0.05/gal from last month's STEO, and $2.73/gal in 2016. The average household is expected to spend $710 less for gasoline in 2015 compared with last year because of lower prices.
  • Natural gas working inventories on February 27 totaled 1,710 billion cubic feet (Bcf), 492 Bcf (40%) above the level at the same time in 2014 but 143 Bcf (8%) below the previous five-year (2010-14) average. EIA expects the Henry Hub natural gas spot price, which averaged $4.39/million British thermal units (MMBtu) in 2014, to average $3.07/MMBtu in 2015 and $3.48/MMBtu in 2016, largely unchanged from last month's STEO.
  • Much of the eastern United States experienced a very cold February, which resulted in increased electricity demand for space heating. EIA estimates total U.S. generation during February 2015 averaged 11,800 gigawatthours (GWh) per day, which would be a monthly record for February. However, this estimated level of generation still falls short of the winter-month record for total U.S. power generation (12,178 GWh per day) during January 2014.



Price Summary
  2013 2014 2015 2016
a West Texas Intermediate.
b Average regular pump price.
c On-highway retail.
d U.S. Residential average.
WTI Crude Oila
(dollars per barrel)
97.91 93.26 52.15 70.00
Brent Crude Oil
(dollars per barrel)
108.60 99.00 59.50 75.03
(dollars per gallon)
3.51 3.36 2.39 2.73
(dollars per gallon)
3.92 3.83 2.89 3.25
Heating Oild
(dollars per gallon)
3.78 3.72 2.82 3.05
Natural Gasd
(dollars per thousand cubic feet)
10.30 10.94 10.24 10.64
(cents per kilowatthour)
12.12 12.50 12.63 12.86

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