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Short-Term Energy Outlook

Release Date: March 6, 2018  |  Next Release Date: April 10, 2018  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Petroleum Products

Gasoline prices: The 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 $1.90 per gallon (gal) on March 1 (Figure 5), virtually unchanged since February 1. The RBOB-Brent crack spread (the difference between the price of RBOB and the price of Brent crude oil) increased by 14 cents/gal over the same period to settle at 38 cents/gal. The RBOB-Brent crack spread declined 5 cents/gal in February before the contract changed to summer grade gasoline on March 1, causing a significant one day increase in the crack spread.

Gasoline inventories, which typically decline between January and February, rose this year in all regions of the United States. Total U.S. gasoline stocks rose 6.3 million barrels between the weeks ending February 2 and February 23. Total U.S. gasoline stocks have declined between January and February on average by 5.8 million barrels over the past five years, according to EIA’s Petroleum Supply Monthly (PSM).

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

Ultra-low sulfur diesel prices: The ultra-low sulfur diesel (ULSD) front-month futures price decreased 20 cents/gal from February 1 to settle at $1.89/gal on March 1. The ULSD-Brent crack spread (the difference between the price of ULSD and the price of Brent crude oil) decreased by 7 cents/gal over the same period, settling at 37 cents/gal (Figure 6).

Similar to the movements seen in the gasoline market, distillate crack spreads fell in February, as distillate inventories rose counter-seasonally. In the Central Atlantic (PADD 1B), which includes the New York Harbor delivery point of the ULSD futures contract, distillate inventories rose 0.7 million barrels between the weeks ending February 2 and February 23. In comparison, distillate inventories in PADD 1B declined 2.7 million barrels on average between January and February in the past five years, according to the PSM. For much of February, the U.S. East Coast and the U.S. Northeast experienced warmer-than-normal temperatures, which likely reduced demand for home heating.

Figure 6: Historical ULSD front-month futures price and crack spread

In recent months, year-over-year growth in total U.S. liquid fuels consumption and exports has accelerated to levels not seen since 2015. Since October 2017, year-over-year growth in total liquid fuels consumption and exports averaged 1.0 million b/d, with an increasing portion of the growth coming from hydrocarbon gas liquids (HGL), which includes propane and ethane (Figure 7).

EIA expects U.S. liquid fuels consumption to grow 0.47 million b/d (2.4%) in 2018, the highest growth rate since 2013. EIA projects that most of the consumption growth will come from natural gas-sourced products. HGL consumption is expected to account for 0.34 million b/d of total liquid fuels consumption growth. Ethane is expected to account for almost 65% of this HGL consumption growth, as new domestic ethylene crackers begin operating.

Figure 7: Historical ULSD front-month futures price and crack spread

U.S. Petroleum and Other Liquids
Crude Oil prices (dollars per barrel)
WTI Spot Average 43.3350.7958.1757.51
Brent Spot Average 43.7454.1562.1361.51
Imported Average 38.7048.9954.8453.98
Refiner Average Acquisition Cost 40.6950.6557.1556.52
Retail prices including taxes (dollars per gallon)
Regular Gasoline 2.152.422.602.58
Diesel Fuel 2.312.652.902.86
Heating Oil 2.102.512.802.82
Production (million barrels per day)
Crude Oil 8.869.3210.7011.27
Natural Gas Plant Liquids 3.513.744.304.63
Fuel Ethanol
Biodiesel 0.1020.1040.1380.149
Consumption (million barrels per day)
Motor Gasoline 9.329.329.359.39
Distillate Fuel Oil 3.883.944.034.09
Jet Fuel 1.611.681.711.71
Total Consumption 19.6919.8820.3520.71
Primary Assumptions (percent change from previous year)
U.S. Real GDP Growth
Heating Degree Days -5.1-
Distillate-weighted Industrial Production

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