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Short-Term Energy Outlook

Release Date: January 15, 2019  |  Next Release Date: February 12, 2019  |  Full Report    |   Text Only   |   All Tables   |   All Figures


Forecast Highlights

  • This edition of the Short-Term Energy Outlook is the first to include forecasts for 2020.
  • EIA forecasts Brent prices will average $61 per barrel (b) in 2019 and $65/b in 2020. In 2018, Brent prices averaged $71/b. EIA expects West Texas Intermediate (WTI) crude oil prices will average $8/b lower than Brent prices in the first quarter of 2019 before the discount gradually falls to $4/b in the fourth quarter of 2019 and throughout 2020. EIA’s forecast for the average WTI price for December 2019 of $59/b should be considered in the context of NYMEX futures and option contract values for December 2019 delivery. NYMEX trading during the five-day period ending January 10, 2019, suggest that a range of $28/b to $101/b encompasses the market expectation for December 2019 WTI prices at the 95% confidence level.
  • Beginning on January 1, 2020, the International Maritime Organization (IMO) is set to enact the Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL Convention), which lowers the maximum sulfur content of marine fuel oil used in ocean-going vessels from 3.5% to 0.5%. EIA expects that, starting in the fourth quarter of 2019, this regulation will encourage global refiners to increase refinery runs and maximize upgrading of high-sulfur heavy fuel oil into low-sulfur distillate fuel to create compliant bunker fuels. EIA expects total U.S. refinery runs to increase by 4% from 2019 to reach a record level of 17.9 million barrels per day (b/d) on average in 2020, resulting in refinery utilization rates that average 96%. EIA forecasts that one of the most significant impacts from the regulations will be on diesel wholesale margins, which increase from an average of 43 cents per gallon (gal) in 2018 to 48 cents/gal in 2019 and then to 65 cents/gal in 2020. Because of the numerous and diverse set of decision makers involved in complying with the regulation and the global nature of the regulation, significant uncertainty exists about the forecast outcomes of the regulation.
  • U.S. regular gasoline retail prices will average $2.47/gal in 2019 and $2.62/gal in 2020 in EIA’s forecast, which would be a decrease from an average of $2.73/gal in 2018.
  • EIA estimates that U.S. crude oil production averaged 10.9 million b/d in 2018, up 1.6 million b/d from 2017, reaching its highest level and seeing its largest volume growth on record. EIA forecasts U.S. crude oil production to average 12.1 million b/d in 2019 and 12.9 million b/d in 2020, with most of the growth coming from the Permian region of Texas and New Mexico.
  • U.S. crude oil and petroleum product net imports are estimated to have fallen from an average of 3.8 million b/d in 2017 to an average of 2.4 million b/d in 2018. EIA estimates that the United States briefly was a net exporter of crude oil and petroleum products in November 2018. EIA forecasts that net imports will continue to fall to an average of 1.1 million b/d in 2019, and to less than 0.1 million b/d in 2020. In the fourth quarter of 2020, EIA forecasts the United States will be a net exporter of crude oil and petroleum products, by about 0.9 million b/d.
  • Global liquid fuels end-of-year inventories grew by an estimated 0.4 million b/d in 2018 and EIA expects they will grow by 0.2 million b/d in 2019 and by 0.4 million b/d in 2020.
  • U.S. dry natural gas production averaged a record high 83.3 billion cubic feet per day (Bcf/d) in 2018. EIA forecasts dry natural gas production will average 90.2 Bcf/d in 2019 and 92.2 Bcf/d in 2020. Increases in the Appalachia and Permian regions drive the forecast growth.
  • EIA forecasts that Henry Hub natural gas spot prices will average $2.89 per million British thermal units (MMBtu) in 2019 and $2.92/MMBtu in 2020, down from $3.15/MMBtu in 2018. EIA’s forecast for the average Henry Hub price for December 2019 of $3.25/MMBtu should be considered in the context of NYMEX futures and option contract values for December 2019 delivery. NYMEX trading during the five-day period ending January 10, 2019, suggest that a range of $1.85/MMBtu to $4.80/MMBtu encompasses the market expectation for Henry Hub prices in December 2019 at the 95% confidence level.
  • EIA forecasts that U.S. coal production will total 729 million short tons (MMst) in 2019, down by 25 MMst (3%) from 2018. Coal production will further decline by 50 MMst (7%) in 2020. This decrease is the result of coal’s relatively weak competiveness in the electric power sector compared with natural gas, as well as an assumption of lower demand for U.S. coal exports.
  • EIA expects the share of U.S. total utility-scale electricity generation from natural gas-fired power plants to rise from 35% in 2018 to 37% in 2020. Coal’s forecast share of electricity generation falls from 28% in 2018 to 24% in 2020. The nuclear share of generation was 19% in 2018 and EIA forecasts that it will be about the same share in 2020. Nonhydropower renewables provided 10% of generation in 2018 and are expected to provide 13% in 2020. Hydropower’s share of generation was 7% in 2018 and is forecast to be similar in 2019 and in 2020. In 2019, EIA expects wind’s annual share of generation will exceed hydropower’s share for the first time.
  • After increasing by 2.8% in 2018, EIA forecasts that energy-related carbon dioxide (CO2) emissions will fall by 1.2% in 2019 and by 0.8% in 2020. The declines reflect a forecast of more typical weather compared with 2018 and shifts in fuel use. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.
Price Summary
  2017201820192020
aWest Texas Intermediate.
bAverage regular pump price.
cOn-highway retail.
dU.S. Residential average.
WTI Crude Oila
(dollars per barrel)
50.7965.0654.1960.76
Brent Crude Oil
(dollars per barrel)
54.1571.1960.5264.76
Gasolineb
(dollars per gallon)
2.422.732.472.62
Dieselc
(dollars per gallon)
2.653.182.943.13
Heating Oild
(dollars per gallon)
2.513.012.853.04
Natural Gasd
(dollars per thousand cubic feet)
10.8610.6110.8411.00
Electricityd
(cents per kilowatthour)
12.8912.9113.2613.49

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