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Short-Term Energy Outlook

Release Date: September 9, 2014  |  Next Release Date: October 7, 2014  |  Full Report    |   Text Only   |   All Tables   |   All Figures

U.S. Petroleum and Other Liquids

After reaching a summer peak of $3.70/gal in late June, U.S. average regular gasoline retail prices fell to $3.45/gal on August 25, the lowest price on the Monday before Labor Day since 2010. Gasoline prices have fallen from their summer peak in late June primarily because of lower crude oil prices, which in addition to reduced geopolitical risk premiums to Iraqi and Libyan oil exports, have been driven downward because of weakening global oil demand indicators in combination with growing international oil supplies. EIA expects that U.S. regular gasoline retail prices will continue to fall through the end of the year, reaching $3.18/gal in December, which would mark the lowest monthly average since January 2011.

Liquid Fuels Consumption

EIA has revised total 2013 U.S. petroleum and other liquids consumption upwards by 74,000 bbl/d to 18.96 million bbl/d. Upward revisions in motor gasoline (69,000 bbl/d), special naphthas (66,000 bbl/d), and hydrocarbon gas liquids (HGL) (47,000 bbl/d) were offset by a 113,000 bbl/d reduction in unfinished oils consumption. Total U.S. petroleum and other liquids consumption rose by 470,000 bbl/d (2.5%) in 2013, the largest annual increase since 2004. Motor gasoline consumption rose by 160,000 bbl/d (1.9%). High petrochemical demand and a very wet corn crop late in the year contributed to a 100,000 bbl/d (8.5%) increase in propane consumption last year.

Total consumption is expected to fall slightly, by 0.2%, in 2014. A year-over-year increase in total consumption of 170,000 bbl/d during the first quarter is expected to be more than offset by an average 150,000 bbl/d decline during the second half of the year. Propane consumption retreats from last year's growth, falling by an average of 110,000 bbl/d this year. Distillate fuel consumption is projected to increase by an average of 160,000 bbl/d (4.2%) in 2014.

Total consumption grows by 150,000 bbl/d in 2015 to average 19.08 million bbl/d, an increase of 100,000 bbl/d from last month's STEO. HGL consumption, primarily ethane and propane, increases by 120,000 bbl/d next year, while distillate consumption is 70,000 bbl/d higher.

Liquid Fuels Supply

The forecast for total U.S. crude oil production increases from an estimated 7.45 million bbl/d in 2013 to 8.53 million bbl/d in 2014 and 9.53 million bbl/d in 2015. The 2014 and 2015 forecasts are 0.07 million bbl/d and 0.25 million bbl/d higher than in last month's STEO, respectively. 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 1.67 million bbl/d in 2015, 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. Most of this growth is expected to come from additional ethane and propane production that will meet growing demand associated with expanding domestic ethylene and propylene 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 32% in 2013. EIA expects the net import share to decline to 21% in 2015, which would be the lowest level since 1968.

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 $3.41/gal in September, before falling to $3.18/gal in December. The U.S. annual average regular gasoline retail price, which averaged $3.51/gal in 2013, is projected to average $3.46/gal in 2014 and $3.41/gal in 2015, 4 cents and 6 cents lower than in last month's STEO, respectively. Diesel fuel prices, which averaged $3.92/gal in 2013, are projected to fall to an average of $3.86/gal in 2014 and $3.82/gal in 2015, 2 cents and 5 cents lower than projected in last month's STEO, respectively. 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 falling above or below the national average price by 30 cents/gal or more.

U.S. Petroleum and Other Liquids
  2012 2013 2014 2015
Crude Oil prices (dollars per barrel)
WTI Spot Average 94.12 97.91 98.28 94.67
Brent Spot Average 111.65 108.64 106.00 103.00
Imported Average 101.09 98.12 94.28 91.23
Refiner Average Acquisition Cost 100.82 100.46 97.01 93.72
Retail prices including taxes (dollars per gallon)
Regular Gasoline 3.63 3.51 3.46 3.41
Diesel Fuel 3.97 3.92 3.86 3.82
Heating Oil 3.79 3.78 3.81 3.69
Production (million barrels per day)
Crude Oil 6.50 7.45 8.53 9.53
Natural Gas Plant Liquids 2.41 2.61 2.91 3.12
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 8.84 8.82 8.81
Distillate Fuel Oil 3.74 3.83 3.99 4.06
Jet Fuel 1.40 1.43 1.46 1.45
Total Consumption 18.49 18.96 18.92 19.08
Primary Assumptions (percent change from previous year)
U.S. Real GDP Growth 2.3 2.2 2.1 2.8
Heating Degree Days -12.6 18.5 1.0 -6.4
Distillate-weighted Industrial Production 2.9 2.9 3.3 4.7

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