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Short-Term Energy Outlook

Release Date: July 8, 2014  |  Next Release Date: August 12, 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 fall by 10,000 bbl/d in 2014, with declines in the consumption of residual fuel oil and unfinished oils offsetting increases in distillate fuel and gasoline. Total consumption grows by 70,000 bbl/d in 2015, with HGL consumption increasing by 80,000 bbl/d.

Motor gasoline consumption grew by 90,000 bbl/d (1.1%) in 2013, the largest increase since 2006. Motor gasoline consumption grows by 30,000 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 120,000 bbl/d and 60,000 bbl/d in 2014 and 2015, respectively.

Liquid Fuels Supply

The forecast for total U.S. crude oil production increases from an estimated 7.4 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. Recent U.S. crude oil production growth has consisted primarily of lighter, sweet crude (a description of crude quality, as measured by API gravity and sulfur content) from tight resource formations. Roughly 96% of the 1.8-million-bbl/d growth in production between 2011 and 2013 consisted of sweet grades with lighter API gravity of 40 or above. EIA analysis of current and forecast crude oil production indicates that U.S. supply of lighter API gravity crude will continue to outpace that of medium and heavier crudes. More than 60% of EIA's forecast production growth for 2014 and 2015 consists of light, sweet grades with API gravity of 40 or above.

HGL production at natural gas liquids plants is projected to rise from 2.6 million bbl/d in 2013 to 3.0 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

The U.S. annual average regular gasoline retail price, which averaged $3.51/gal in 2013, is projected to increase to an average of $3.54/gal in 2014 before falling to $3.45/gal in 2015. Diesel fuel prices, which averaged $3.92/gal in 2013, are projected to average $3.93/gal in 2014 and $3.88/gal in 2015, 3 cents and 10 cents higher than projected in last month's STEO, respectively.

EIA expects that the monthly average regular gasoline retail price will fall from $3.69/gal in June to $3.61/gal in September. The September 2014 New York Harbor reformulated blendstock for oxygenate blending (RBOB) futures contract averaged $3.01/gal for the five trading days ending July 2. Based on the market value of futures and options contracts for this key petroleum component of gasoline, there is a 4% probability that its price at expiration will exceed $3.35/gal, consistent with a monthly average regular-grade gasoline retail price exceeding $4.00/gal in September 2014. 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 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 97.91 100.98 95.17
Brent Spot Average 111.65 108.64 109.55 104.92
Imported Average 101.09 98.12 97.29 91.67
Refiner Average Acquisition Cost 100.83 100.46 99.80 94.15
Retail prices including taxes (dollars per gallon)
Regular Gasoline 3.63 3.51 3.54 3.45
Diesel Fuel 3.97 3.92 3.93 3.88
Heating Oil 3.79 3.78 3.85 3.75
Production (million barrels per day)
Crude Oil 6.49 7.44 8.46 9.28
Natural Gas Plant Liquids 2.41 2.56 2.85 2.97
Fuel Ethanol 0.86 0.87 0.93 0.94
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 3.95 4.01
Jet Fuel 1.40 1.42 1.43 1.41
Total Consumption 18.49 18.89 18.88 18.95
Primary Assumptions (percent change from previous year)
U.S. Real GDP Growth 2.8 1.9 2.2 2.9
Heating Degree Days -12.6 18.5 1.0 -6.5
Distillate-weighted Industrial Production 2.9 2.9 3.3 4.8

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