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Short-Term Energy Outlook

Release Date: August 12, 2014  |  Next Release Date: September 9, 2014  |  Full Report    |   Text Only   |   All Tables   |   All Figures

U.S. Petroleum and Other Liquids

Liquid Fuels Consumption

Total U.S. liquid fuels consumption rose by 400,000 bbl/d (2.1%) in 2013. Consumption of hydrocarbon gas liquids (HGL) registered the largest gain in 2013, increasing by 150,000 bbl/d (6.4%). Total consumption is expected to be flat in 2014, with declines in the consumption of hydrocarbon gas liquids, residual fuel oil, and unfinished oils offsetting increases in distillate fuel, gasoline, and jet fuel. Total consumption grows by 90,000 bbl/d in 2015, with HGL consumption increasing by 100,000 bbl/d.

Motor gasoline consumption grew by 90,000 bbl/d (1.1%) in 2013, the largest annual increase since 2006. Motor gasoline consumption grows by 40,000 bbl/d in 2014 and then falls by 10,000 bbl/d in 2015 as improving fuel economy in new vehicles increasingly offsets highway travel growth. Distillate fuel consumption increased by 90,000 bbl/d (2.5%) last year, reflecting colder weather and economic growth. Consumption of that fuel rises by 140,000 bbl/d and 70,000 bbl/d in 2014 and 2015, respectively.

In 2013, consumption of HGL increased by 150,000 bbl/d, led by a 90,000-bbl/d increase in propane consumption. Propane demand was unusually high last year because of strong petrochemical demand in the first half of the year, followed by high crop-drying demand and cold weather late in the year. EIA projects a 60,000-bbl/d decline in HGL consumption in 2014, with propane consumption returning to 2012 levels as higher propane prices reduce the use of propane as a petrochemical feedstock. HGL consumption increases by 100,000 bbl/d in 2015, with propane forecast to increase by 60,000 bbl/d as new propane dehydrogenation units, which produce propylene, are expected to come online in the second half of the year.

Liquid Fuels Supply

The forecast for total U.S. crude oil production increases from an estimated 7.5 million bbl/d in 2013 to 8.5 million bbl/d in 2014 and 9.3 million bbl/d in 2015. The highest previous annual average U.S. production level was 9.6 million bbl/d in 1970. Oil production from the Gulf of Mexico is expected to increase from 1.25 million bbl/d in 2013 to 1.44 million bbl/d in 2014, with 11 projects starting this year. Six projects began production in the first half of 2014: Na Kika Phase 3, Mars B, Dalmatian, Entrada, Atlantis Phase 2, and Tubular Bells. Additional wells are expected to come online in the fourth quarter of 2014 from the Cardamom Deep, South Deimos/West Boreas, Hadrian South, Jack/St. Malo, and Lucius projects.

HGL production at natural gas liquids plants is projected to increase from 2.6 million bbl/d in 2013 to 3.1 million bbl/d in 2015. About half of this growth is expected to come from ethane production to meet growing demand associated with expanding domestic ethylene production and export capacity.

The growth in domestic production has contributed to a significant decline in petroleum imports. The share of total U.S. liquid fuels consumption met by net imports fell from 60% in 2005 to an average of 33% in 2013. EIA expects the net import share to decline to 22% in 2015, which would be the lowest level since 1970.

Petroleum Product Prices

EIA expects that the monthly average regular gasoline retail price will fall from the recent peak of $3.69/gal in June to $3.50/gal in September, before falling to $3.30/gal in December. The U.S. annual average regular gasoline retail price, which averaged $3.51/gal in 2013, is projected to average $3.50/gal and $3.46/gal in 2014 and 2015, respectively. Diesel fuel prices, which averaged $3.92/gal in 2013, are projected to fall to an average of $3.89/gal in 2014, 4 cents lower than projected in last month's STEO, and $3.87/gal in 2015.

U.S. Petroleum and Other Liquids
  2012 2013 2014 2015
Crude Oil prices (dollars per barrel)
WTI Spot Average 94.12 97.91 100.45 96.08
Brent Spot Average 111.65 108.64 108.11 105.00
Imported Average 101.09 98.12 96.62 92.65
Refiner Average Acquisition Cost 100.82 100.46 99.33 95.11
Retail prices including taxes (dollars per gallon)
Regular Gasoline 3.63 3.51 3.50 3.46
Diesel Fuel 3.97 3.92 3.89 3.87
Heating Oil 3.79 3.78 3.83 3.74
Production (million barrels per day)
Crude Oil 6.50 7.45 8.46 9.28
Natural Gas Plant Liquids 2.41 2.56 2.88 3.11
Fuel Ethanol 0.86 0.87 0.93 0.93
Biodiesel 0.064 0.087 0.080 0.084
Consumption (million barrels per day)
Motor Gasoline 8.68 8.77 8.81 8.80
Distillate Fuel Oil 3.74 3.84 3.97 4.04
Jet Fuel 1.40 1.42 1.44 1.42
Total Consumption 18.49 18.89 18.88 18.98
Primary Assumptions (percent change from previous year)
U.S. Real GDP Growth 2.8 1.9 1.7 2.8
Heating Degree Days -12.6 18.5 2.0 -7.2
Distillate-weighted Industrial Production 2.9 2.9 3.4 4.7

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