Short-Term Energy Outlook

U.S. Liquid Fuels

The February Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve. Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply over the past year and will continue to affect these patterns in the future. U.S. gross domestic product (GDP) declined by 3.6% in 2020 from 2019 levels. This STEO assumes U.S. GDP will grow by 3.8% in 2021 and by 4.2% in 2022. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit.

EIA estimates that U.S. crude oil production averaged 11.0 million b/d in January, which is down slightly from 11.1 million b/d in November (the most recent month for which historical data are available). EIA expects production will continue to decline slightly in the coming months, reaching 10.9 million b/d in June. Although oil-directed drilling has increased in the United States in recent months, the number of active drilling rigs remains lower than year-ago levels. EIA expects production from newly drilled wells will be more than offset by declining production rates at existing wells in the first half of 2021. However, based on EIA’s forecast that West Texas Intermediate crude oil prices will remain near or higher than $50/b during the forecast period, EIA expects drilling will continue to increase. As a result, production from new wells will exceed the declines from legacy wells, and overall crude oil production will increase in the second half of 2021 and in 2022. EIA estimates that U.S. crude oil production will average 11.0 million b/d in 2021—down from 11.3 million b/d in 2020 and 12.2 million b/d in 2019—and will rise to 11.5 million b/d in 2022.

U.S. regular gasoline retail prices averaged $2.33 per gallon (gal) in January, compared with an average of $2.20/gal in December and $2.55/gal in January 2020. EIA forecasts gasoline prices to average $2.44/gal in 2021 and $2.46/gal in 2022. U.S. diesel fuel prices averaged $2.68/gal in January compared with $2.58/gal in December and $3.05/gal in January 2020, and EIA forecasts it will average $2.70/gal in 2021 and $2.77/gal in 2022.

On a volume basis, U.S. consumption of gasoline declined by more than other petroleum products in 2020. EIA forecasts that U.S. gasoline consumption will rise in the forecast but remain lower than 2019 levels. U.S. gasoline consumption is forecast to average 8.6 million b/d in 2021 and 8.9 million b/d in 2022, up from 8.0 million b/d in 2020 but lower than the 9.3 million b/d consumed in 2019.

U.S. Petroleum and Other Liquids
	2019	2020	2021projected	2022projected
Crude Oil prices	(dollars per barrel)
WTI Spot Average	56.99	39.17	50.21	51.56
Brent Spot Average	64.34	41.69	53.20	55.19
Imported Average	57.95	37.24	48.09	49.23
Refiner Average Acquisition Cost	59.36	39.68	49.19	50.20
Retail prices including taxes	(dollars per gallon)
Regular Gasoline	2.60	2.18	2.44	2.46
Diesel Fuel	3.06	2.55	2.70	2.77
Heating Oil	3.00	2.44	2.71	2.74
Production	(million barrels per day)
Crude Oil	12.25	11.31	11.02	11.53
Natural Gas Plant Liquids	4.82	5.16	5.39	5.70
Fuel Ethanol	1.03	0.90	0.98	1.01
Biodiesel	0.112	0.118	0.122	0.130
Consumption	(million barrels per day)
Motor Gasoline	9.31	8.04	8.62	8.93
Distillate Fuel Oil	4.10	3.76	3.98	4.09
Hydrocarbon Gas Liquids	3.14	3.17	3.32	3.53
Jet Fuel	1.74	1.08	1.39	1.70
Total Consumption	20.54	18.08	19.43	20.43
Primary Assumptions	(percent change from previous year)
U.S. Real GDP Growth	2.2	-3.6	3.8	4.2
Heating Degree Days	0.6	-9.3	3.7	2.0
Distillate-weighted Industrial Production	-0.2	-5.5	3.3	2.0

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Related Tables
Table WF01. Average Consumer Prices and Expenditures for Heating Fuels During the Winter	PDF
Table 1. U.S. Energy Markets Summary	PDF
Table 2. Energy Prices	PDF
Table 4a. U.S. Petroleum and Other Liquids Supply, Consumption, and Inventories	PDF
Table 4b. U.S. Hydrocarbon Gas Liquids (HGL) and Petroleum Refinery Balances	PDF
Table 4c. U.S. Regional Motor Gasoline Prices and Inventories	PDF
Table 9a. U.S. Macroeconomic Indicators and CO₂ Emissions	PDF
Table 9b. U.S. Regional Macroeconomic Data	PDF
Table 9c. U.S. Regional Weather Data	PDF

Related Figures
West Texas Intermediate (WTI) crude oil price	XLSX	PNG
U.S. gasoline and crude oil prices	XLSX	PNG
U.S. diesel fuel and crude oil prices	XLSX	PNG
U.S. crude oil production	XLSX	PNG
U.S. commercial crude oil stocks	XLSX	PNG
U.S. liquid fuels production growth	XLSX	PNG
U.S. liquid fuels product supplied growth	XLSX	PNG
U.S. gasoline and distillate inventories	XLSX	PNG
U.S. net trade of crude oil and liquid fuels	XLSX	PNG
U.S. natural gas plant liquids production	XLSX	PNG
U.S. hydrocarbon gas liquids consumption	XLSX	PNG
U.S. net trade of hydrocarbon gas liquids	XLSX	PNG
U.S. commercial propane inventories	XLSX	PNG
U.S. carbon dioxide emissions growth	XLSX	PNG
U.S. winter heating degree days	XLSX	PNG
U.S. census regions and census divisions	XLSX	PNG

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