EIA Releases Updated Energy Outlook

Highlights...

• After falling to the lowest monthly average of 2013 in November, U.S. regular gasoline retail prices increased slightly to reach an average of $3.28 per gallon (gal) during December. The annual average regular gasoline retail price, which was $3.51/gal in 2013, is expected to fall to $3.46/gal in 2014 and $3.39/gal in 2015.

• The North Sea Brent crude oil spot price in December averaged near $110 per barrel (bbl) for the sixth consecutive month. EIA expects the Brent crude oil price to decline gradually to average $105/bbl and $102/bbl in 2014 and 2015, respectively. Projected West Texas Intermediate (WTI) crude oil prices average $93/bbl during 2014 and $90/bbl during 2015.

• EIA expects liquid fuels production from countries outside of the Organization of the Petroleum Exporting Countries (OPEC) to grow year-over-year by a record high of 1.9 million barrels per day (bbl/d) in 2014. The United States and Canada together are projected to account for almost 70% of total non-OPEC supply growth this year.

• EIA estimates U.S. total crude oil production averaged 7.5 million bbl/d in 2013, an increase of 1.0 million bbl/d from the previous year. Projected domestic crude oil production continues to increase to 8.5 million bbl/d in 2014 and 9.3 million bbl/d in 2015. The 2015 forecast would mark the highest annual average level of production since 1972.

• Natural gas working inventories on December 27 totaled 2.97 trillion cubic feet (Tcf), 0.56 Tcf below the level at the same time a year ago and 0.29 Tcf below the previous five-year average (2008-12). EIA expects that the Henry Hub natural gas spot price, which averaged $3.73 per million British thermal units (MMBtu) in 2013, will average $3.89/MMBtu in 2014 and $4.11/MMBtu in 2015.

• Coal production, which fell by almost 9% between 2011 and 2013, is expected to increase by 36 million short tons (MMst) (3.6%) in 2014 as higher natural gas prices favor the dispatch of coal-fired power plants and the drawdown of coal inventory ends. In 2015, however, forecast coal-fired production falls by 2.5% with declining coal use in the electric power sector as retirements of coal-fired power plants rise due to the implementation of the U.S. EPA's new environmental standards.

Source: EIA