The U.S. Energy Information Administration (EIA) on Tuesday released its Short-Term Energy Outlook (STEO) for November. Despite a retail gasoline price increase of two cents a barrel in the month to $2.86, the EIA now forecasts that the gas prices at the end of December will have fallen from an October forecast of $2.79 a gallon to $2.57. A gallon of gas averaged $2.42 in 2017.
EIA is forecasting that the average price for a barrel of Brent crude oil will be slightly more than $73 a barrel this year and just under $72 a barrel in 2019. West Texas Intermediate (WTI) crude is expected cost about $7 a barrel less in both years. These forecasts have all fallen by about $1 a barrel since EIA’s October report.
The agency also expects gasoline prices to average $2.75 per gallon for all of next year, a decrease of 10 cents a gallon since last month’s projection.
Contributing to a decline of around 2.5% in WTI spot prices Tuesday is the EIA estimate that U.S. crude oil production averaged 11.4 million barrels a day in October and will average 10.9 million barrels a day for the full year, up from a daily average of 9.4 million barrels in 2017. October production was 200,000 barrels a day higher than estimated September production. For 2019, the EIA now projects U.S. production will average nearly 12.1 million barrels a day.
U.S. natural gas production averaged 86.9 billion cubic feet per day in October, a gain of 700 million cubic feet. For the full year, EIA forecasts dry gas production at an average daily rate of 83.2 billion cubic feet, up 8.5 billion compared with last year. Both would set new records. For 2019, the agency now sees average daily production rising to 89.6 billion cubic feet.
Non-OPEC liquids production is forecast to rise by about 2.56 million barrels a day to 60.98 million barrels a day. Total world production is forecast at 100.09 million barrels a day, up from 97.71 million in 2017. Annual global consumption is forecast at 100.07 million barrels a day in 2019. In the October STEO, consumption surpassed production.
WTI crude oil prices are forecast to rise from an average of $50.79 a barrel in 2017 to $66.79 this year, dipping to $64.85 in 2019. Prices for Brent crude are forecast to average $73.12 a barrel this year and about $71.92 a barrel in 2019.
The STEO also notes that natural gas prices are expected to average $3.12 per million BTUs in 2018 and $3.09 in 2019, up two cents this year and down 14 cents for next year.
WTI crude oil for December delivery opened down about 0.5% Tuesday at $62.79 a barrel and recently traded down about 2.6% at $61.45. The January 2019 futures contract traded at $61.64 a barrel.