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Short-Term Energy Outlook

Release Date: March 12, 2019  |  Next Release Date: April 9, 2019  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Petroleum Products

Gasoline prices: The New York Harbor front-month futures price of reformulated blendstock for oxygenate blending (RBOB, the petroleum component of gasoline used in many parts of the country) settled at $1.81 per gallon (gal) on March 7, 2019 (Figure 4), an increase of 37 cents/gal from February 1, 2019. The RBOB–Brent crack spread (the difference between the price of RBOB and the price of Brent crude oil) increased by 28 cents/gal to settle at 23 cents/gal during the same period. The RBOB–Brent crack spread increased 11 cents/gal in February before the contract changed to summer-grade gasoline on March 1, causing a typical seasonal increase in the crack spread.

Despite the increase in the RBOB–Brent crack spread in recent weeks, it remains significantly lower than average levels for this time of year. In February, U.S. gasoline consumption combined with exports remained near 2018 levels but have failed to reduce inventory levels significantly, likely because of high refinery production. STEO estimates that U.S. gasoline production from refineries (excluding ethanol net inputs and other blending component net inputs) averaged 7.8 million barrels per day (b/d) during January and February, which would be just lower than 2018’s all-time high if confirmed in EIA’s Petroleum Supply Monthly.

Figure 4: Historical RBOB front-month futures prices and crack spread

Ultra-low sulfur diesel prices: The ultra-low sulfur diesel (ULSD) front-month futures price for delivery in New York Harbor settled at $2.01/gal on March 7, 2019 (Figure 5), an increase of 10 cents/gal from February 1, 2019. The ULSD–Brent crack spread (the difference between the price of ULSD and the price of Brent crude oil) increased by 2 cents/gal to settle at 43 cents/gal during the same period.

The February average ULSD–Brent crack spread of 43 cents/gal was 9% higher than the five-year average (2014–18) for the month, continuing a trend of strong distillate refining margins. STEO estimates U.S. distillate consumption was 2% higher year-over-year in February, at 4.1 million b/d, likely because of colder weather compared with February 2018. This consumption level—along with four-week average exports of 1.2 million b/d for the week ending March 1—contributed to an estimated 3 million barrel draw in domestic distillate inventories from January to February. STEO estimates that distillate inventories ended February 3% lower than the five-year average level, but it forecasts year-end 2019 distillate inventories to be 146 million barrels, a 4% increase over year-end 2018.

Figure 5: Historical ULSD front-month futures prices and crack spread

U.S. Petroleum and Other Liquids
  2017201820192020
Crude Oil prices (dollars per barrel)
WTI Spot Average 50.7965.0656.1358.00
Brent Spot Average 54.1571.1962.7862.00
Imported Average 48.9861.5654.3952.56
Refiner Average Acquisition Cost 50.6864.4354.6455.36
Retail prices including taxes (dollars per gallon)
Regular Gasoline 2.422.732.502.56
Diesel Fuel 2.653.183.013.15
Heating Oil 2.513.012.883.01
Production (million barrels per day)
Crude Oil 9.3510.9512.3013.03
Natural Gas Plant Liquids 3.784.354.925.25
Fuel Ethanol 1.041.051.041.05
Biodiesel 0.1040.1190.1440.158
Consumption (million barrels per day)
Motor Gasoline 9.339.329.359.37
Distillate Fuel Oil 3.934.134.144.20
Hydrocarbon Gas Liquids 2.642.993.193.32
Jet Fuel 1.681.711.781.81
Total Consumption 19.9620.4520.8121.03
Primary Assumptions (percent change from previous year)
U.S. Real GDP Growth 2.22.92.52.0
Heating Degree Days -1.311.8-1.7-0.6
Distillate-weighted Industrial Production 3.02.91.50.8

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