U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Short-Term Energy Outlook
Summer Transportation Fuels Outlook
U.S. Gasoline and Diesel Fuel Prices
EIA expects that regular-grade gasoline retail prices will average $2.45/gal during the 2015 summer driving season (April through September), down from an average of $3.59/gal last summer. The projected monthly average regular retail gasoline price falls from $2.50/gal in April to $2.43/gal in September. Diesel fuel retail prices are projected to average $2.77/gal this summer, down from an average of $3.89 last summer. Daily and weekly national average prices can differ significantly from monthly and seasonal averages, and there are also significant differences across regions, with monthly average prices in some areas exceeding the national average price by $0.40/gal or more. Any unforeseen refinery outages or other disruptions to supply also have the potential to increase regional product prices beyond forecast levels in the short term.
Because taxes and retail distribution costs are generally stable, movements in gasoline and diesel prices are driven primarily by changes in both crude oil prices and wholesale margins. The retail price projections reflect slowly rising prices for crude oil, best represented by the Brent crude oil price, which will average about $58/bbl ($1.39/gal) this summer compared with an average of $106/bbl ($2.52/gal) last summer. Any difference between actual crude oil prices and EIA's forecast would be reflected in the retail price of motor fuels. Absent other factors specific to the gasoline and diesel fuel markets, each dollar per barrel of sustained change in crude oil prices compared with the forecast translates into approximately a 2.4-cent-per-gallon change in product prices.
EIA expects wholesale gasoline margins (the difference between the wholesale price of gasoline and the Brent crude oil price) will average 36 cents/gal this summer, less than 1 cent/gal higher than last summer and 2 cents/gal higher than the previous five-summer average. Forecast wholesale diesel fuel margins are 45 cents/gal, about 3 cents/gal above last summer's level and 4 cents/gal higher than the previous five-summer average.
As in the case of crude oil, the market's expectation of uncertainty in monthly average gasoline prices is reflected in the pricing and implied volatility of futures and options contracts. New York Harbor RBOB futures contracts for July 2015 delivery traded over the five-day period ending April 2 averaged $1.77/gal. The probability that the RBOB futures price will exceed $2.35/gal (consistent with a U.S. average regular gasoline retail price above $3.00/gal) in July 2015 is about 5%.
During the 2015 summer driving season (April through September), projected motor gasoline consumption averages 9.2 million bbl/d, an increase of 0.14 million bbl/d (1.6%) over last summer. Year-over-year increases in summer highway travel, projected to be 2.5%, are offset by a 0.9% increase in fleetwide fuel efficiency. Finished motor gasoline is supplied by four sources: domestic refinery output, fuel ethanol blending, net imports of gasoline and gasoline blending components, and primary inventories. EIA expects that domestic refinery production, including gasoline blendstock output, will increase by almost 100,000 bbl/d from last summer. Fuel ethanol blending into gasoline is projected to decrease by 10,000 bbl/d from last summer's level to 880,000 bbl/d, which is 9.6% of total gasoline consumption. Projected total gasoline net imports (including blending components) average 210,000 bbl/d, up 23% from last summer.
At the onset of the summer driving season (April 1), total gasoline stocks were 227 million barrels, up 7 million barrels from a year ago and 7 million barrels above the five-year average for beginning-of-season stocks. Stock withdrawals have not been a significant motor gasoline supply source for the summer season in recent years, having averaged only 40,000 bbl/d during the previous five summer seasons. This summer, the total gasoline stock draw is projected to average 55,000 bbl/d, compared with a 46,000 bbl/d draw last summer. Total gasoline inventories are projected to end the summer season at 217 million barrels, 5 million barrels above last year's level and 4 million barrels above the previous five-year average.
Projected consumption of distillate fuel, which includes diesel fuel and heating oil, averages 4.0 million bbl/d this summer, up 120,000 bbl/d (3.0%) from last summer. This growth is driven by increasing manufacturing output and foreign trade. Additionally, some of the growth in distillate fuel consumption comes from Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL Annex VI), which is an international agreement that generally requires the use of fuels below 1,000 parts per million sulfur by marine vessels in most U.S. waters, unless alternative devices, procedures, or compliance methods are used to achieve equivalent emissions reductions. The increase in marine distillate use because of MARPOL regulations will displace the use of some residual fuel oil.Distillate fuel is supplied by four sources: domestic refinery output, biodiesel blending, primary inventories, and net imports. EIA expects refinery output of distillate fuel will average 5 million bbl/d this summer, up 30,000 bbl/d from last summer. The production of biodiesel is forecast to average 85,000 bbl/d this summer, almost unchanged from last summer. Projected distillate fuel net exports average 0.99 million bbl/d this summer, down from 1.05 million bbl/d last summer. Distillate inventories are projected to start the summer at 126 million barrels, up from the 115 million barrels recorded at the start of last summer and below the five-year average of 133 million barrels. Distillate inventories typically build during the summer season in preparation for the heating season. This summer, the build is forecast to average 55,000 bbl/d, down from the 87,000 bbl/d build recorded last summer, but similar to the five-year average summer build of 48,000 bbl/d. End-of-summer stocks are 137 million barrels, up slightly from the 131 million barrels recorded at the end of last summer, but below the five-year end-of-summer average of 142 million barrels.