The U.S. Energy Information Administration (EIA) on Tuesday released its Short-Term Energy Outlook (STEO) for May EIA forecasting that the average price retail price for a gallon of regular gasoline will reach $2.90 a gallon for the April through September summer driving season this year. That’s 49 cents a gallon (20.3%) higher than the average for last year’s driving season and 17 cents a gallon higher than the projection in last month’s STEO. Monthly average gasoline prices are forecast to reach a summer peak of $2.97 a gallon in June, before falling to $2.86 in September.
EIA also is showing that U.S. crude oil production averaged 10.5 million barrels of crude oil a day in April, up by 120,000 barrels over March production.
For the full year, the EIA now forecasts an average per gallon price of $2.79 for regular gasoline and $2.76 a gallon for all grades. That’s a month-over-month forecast increase of 15 cents.
For all of 2018, the EIA estimates U.S. crude production will average 10.7 million barrels a day, up by 100,000 from the prior month estimate. For 2019, the EIA forecasts U.S. production to average 11.9 million barrels a day, up by 460,000 from the previous month’s estimate.
Non-OPEC liquids production is forecast to rise by about 2.5 million barrels a day to 61.23 million. Total world production is forecast at 100.45 million barrels a day, up from 98.01 million in 2017. Annual global consumption is forecast at 100.28 million barrels a day, up from 98.52 million last year.
West Texas Intermediate (WTI) crude oil prices are forecast to rise from an average of $50.79 a barrel in 2017 to $65.58 this year before moderating to $50.86 in 2019. Prices for Brent crude are forecast to be about $5 a barrel higher for both this year and next.
The STEO also notes that natural gas prices are expected to average $3.01 per million BTUs in 2018 and $3.11 in 2019, up month-over-month by two cents and four cents, respectively.
WTI crude oil for June delivery opened down about 0.8% Tuesday at $70.11 a barrel and recently traded down about 2.9% at $68.68. The January 2019 futures contract traded at $65.77, reflecting traders’ concerns that rising U.S. production will keep downward pressure on prices well into the future.