The U.S. Energy Information Administration (EIA) on Tuesday released its Short-Term Energy Outlook (STEO) for April, forecasting an average price retail price for a gallon of regular gasoline will reach $2.74 a gallon for the April through September summer driving season. That’s 33 cents a gallon higher (13.7%) than the average for last year’s driving season.
For the full year, the EIA now forecasts an average per gallon price of $2.64 for regular gasoline and $2.76 a gallon for all grades. This year’s higher gasoline prices will cause an average U.S. household to spend about $190 more on motor fuel than it did last year.
EIA also reports that U.S. crude oil production averaged 10.15 million barrels of crude oil a day in the first quarter of 2018, up by 260,000 barrels from the fourth-quarter 2017 total and the 8.99 million barrel a day total in the first quarter of 2017.
For the month of March, U.S. crude oil production averaged 10.4 million barrels a day, up by 260,000 daily barrels month over month.
For all of 2018, the EIA estimates U.S. crude production will average 10.69 million barrels a day, down by 100,000 barrels a day from the prior month estimate. If that happens, 2018 will surpass the 1970 annual average production of 9.32 million barrels a day. For 2019, the EIA is forecasting U.S. production to average 11.44 million barrels a day, up by 140,000 barrels a day from the previous month’s estimate.
Non-OPEC production is forecast to dip is projected to rise by more than 2.5 million barrels a day this year while OPEC production remains essentially flat. Total world production is forecast at 100.47 million barrels a day, up from 97.95 million barrels a day in 2017. Annual global consumption is forecast at 100.31 million barrels a day, up from 98.52 million barrels last year.
West Texas Intermediate (WTI) crude oil prices are forecast to rise from an average of $50.79 a barrel in 2017 to $58.37 this year before moderating to $58.68 in 2019. Prices for Brent crude are forecast to be about $4 a barrel higher for both this year and next.
The STEO also notes that natural gas prices are expected to average $2.99 per million BTUs in 2018 and $3.07 in 2019.
WTI crude oil for May delivery opened about flat Tuesday at $63.31 a barrel and recently traded up about 2.9% at $65.22. The January 2019 futures contract traded at $61.95, reflecting traders’ concerns that rising U.S. production will keep downward pressure on prices well into the future.