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Short-Term Energy Outlook

Release Date: June 12, 2018  |  Next Release Date: July 10, 2018  |  Full Report    |   Text Only   |   All Tables   |   All Figures


Forecast Highlights

Global Liquid Fuels

  • Brent crude oil spot prices averaged $77 per barrel (b) in May, an increase of $5/b from the April level and the highest monthly average price since November 2014. EIA forecasts Brent spot prices will average $71/b in 2018 and $68/b in 2019. The 2019 forecast price is $2/b higher than in the May STEO. EIA expects West Texas Intermediate (WTI) crude oil prices will average almost $7/b lower than Brent prices in 2018 and $6/b lower than Brent prices in 2019. NYMEX WTI futures and options contract values for September 2018 delivery traded during the five-day period ending June 7, 2018, suggest a range of $52/b to $81/b encompasses the market expectation for September WTI prices at the 95% confidence level.
  • For the 2018 April–September summer driving season, EIA forecasts U.S. regular gasoline retail prices to average $2.87/gallon (gal), up from an average of $2.41/gal last summer. The higher forecast gasoline prices are primarily the result of higher forecast crude oil prices. Monthly average gasoline prices are expected to reach a summer peak in June of $2.92/gal and are forecast to decline gradually afterwards to $2.84/gal in September.
  • EIA estimates that U.S. crude oil production averaged 10.7 million barrels per day (b/d) in May, up 80,000 b/d from the April level. EIA projects that U.S. crude oil production will average 10.8 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 11.8 million b/d in 2019.
  • EIA forecasts that total U.S. crude oil and petroleum product net imports will fall from an annual average of 3.7 million b/d in 2017 to an average of 2.5 million b/d in 2018 and to 1.6 million b/d in 2019, which would be the lowest level of net oil imports since 1959.
  • EIA forecasts crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) will average 32.0 million b/d in 2018, a decrease of 0.4 million b/d from the 2017 level. OPEC crude oil production is expected to increase slightly to an average of 32.1 million b/d in 2019. The increase in production in 2019 is expected to occur despite falling production in Venezuela and Iran. EIA assumes these decreases will be offset by increasing production from Persian Gulf producers, primarily Saudi Arabia.

Natural Gas

  • U.S. dry natural gas production averaged 73.6 billion cubic feet per day (Bcf/d) in 2017. EIA forecasts dry natural gas production will average 81.2 Bcf/d in 2018, establishing a new record. EIA expects natural gas production will rise again in 2019 to 83.8 Bcf/d. .
  • Growing forecast U.S. natural gas production supports increasing forecast liquefied natural gas (LNG) exports. LNG exports averaged 1.9 Bcf/d in 2017. EIA forecasts LNG exports to average 3.0 Bcf/d in 2018 and 5.1 Bcf/d in 2019. Dominion Energy’s Cove Point LNG facility is ramping up exports. In April, the facility exported an estimated 13.4 Bcf, implying baseload utilization of 65%, and in May, it exported an estimated 23.5 Bcf, implying baseload utilization of 94%.
  • EIA expects Henry Hub natural gas spot prices to average $2.99/million British thermal units (MMBtu) in 2018 and $3.08/MMBtu in 2019. NYMEX futures and options contract values for September 2018 delivery that traded during the five-day period ending June 7, 2018, suggest that a range of $2.38/MMBtu to $3.57/MMBtu encompasses the market expectation for September Henry Hub natural gas prices at the 95% confidence level.

Electricity, coal, renewables, and emissions

  • EIA expects the share of U.S. total utility-scale electricity generation from natural gas-fired power plants to rise from 32% in 2017 to 34% in 2018 and 2019. The forecast electricity generation share from coal averages 28% in 2018 and 2019, down from 30% in 2017. The nuclear share of generation was 20% in 2017 and is forecast to be 20% in 2018 and 19% in 2019. Nonhydropower renewables provided slightly less than 10% of electricity generation in 2017 and are expected to provide more than 10% in 2018 and nearly 11% in 2019. The generation share of hydropower was 7% in 2017 and is forecast to be about the same in 2018 and 2019.
  • EIA forecasts coal production to decline by 2% to 756 million short tons (MMst) in 2018. The production decrease is largely attributable to a forecast decline of 5% in domestic coal consumption in 2018, with most of the decline is expected to be in the electric power sector. A forecast decline of 4% in coal exports also contributes to lower expected coal production in 2018. EIA expects coal production to decline by 2% in 2019.
  • In 2017, EIA estimates that wind generation averaged 697,000 megawatthours per day (MWh/d). EIA forecasts that wind generation will rise to 746,000 MWh/d in 2018 and to 777,000 MWh/d in 2019. If factors such as precipitation and snowpack remain as forecast, conventional hydropower is forecast to generate 752,000 MWh/d in 2019, which would make it the first year that wind generation exceeds hydropower generation in the United States.
  • After declining by 0.9% in 2017, EIA forecasts that energy-related carbon dioxide (CO2) emissions will rise by 1.1% in 2018 and by 0.2% in 2019. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.
Price Summary
  2016201720182019
aWest Texas Intermediate.
bAverage regular pump price.
cOn-highway retail.
dU.S. Residential average.
WTI Crude Oila
(dollars per barrel)
43.3350.7964.5361.95
Brent Crude Oil
(dollars per barrel)
43.7454.1571.0667.74
Gasolineb
(dollars per gallon)
2.152.422.772.74
Dieselc
(dollars per gallon)
2.312.653.113.05
Heating Oild
(dollars per gallon)
2.102.512.932.99
Natural Gasd
(dollars per thousand cubic feet)
10.0410.9210.5710.91
Electricityd
(cents per kilowatthour)
12.5512.9013.0513.53

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