EIA Short-Term Energy Outlook May 8, 2012
EIA’s current forecast of the average U.S. refiner acquisition cost of crude oil in 2012 is $110 per barrel, which is $2.50 per barrel lower than in last month’s Outlook, but still about $8 per barrel higher than last year’s average price. EIA expects the price of West Texas Intermediate (WTI) crude oil to average about $104 per barrel in 2012, about $2 per barrel lower than the forecast in last month’s Outlook, but $9 per barrel higher than the 2011 average price. EIA expects crude oil prices to remain relatively flat in 2013.
- With falling global crude oil prices over the past month, EIA has lowered the average regular gasoline retail price forecast for the current April-through-September summer driving season to $3.79 per gallon, 16 cents per gallon below the level in the previous Outlook. EIA expects regular gasoline retail prices to average $3.71 per gallon in 2012 and $3.67 per gallon in 2013, compared with $3.53 per gallon in 2011. The September 2012 New York Harbor Reformulated Blendstock for Oxygenate Blending (RBOB) futures contract averaged $2.99 per gallon for the five trading days ending May 3. Based on the market value of futures and options contracts, there is a 22 percent probability that the RBOB contract price at expiration will exceed $3.30 per gallon, consistent with an average regular-grade gasoline retail price exceeding $4.00 per gallon in September.
- EIA expects U.S. total crude oil production to average 6.2 million barrels per day (bbl/d) in 2012, an increase of 0.5 million bbl/d from last year, and the highest level of production since 1998. Forecast lower-48 onshore crude oil production in 2012 averages over 4.3 million bbl/d, reaching its highest level since 1993. Projected U.S domestic crude oil production increases to 6.4 million bbl/d in 2013, driven primarily by growth in lower-48 onshore production.
- Very mild weather over the past winter contributed to natural gas working inventories that continue to set new record seasonal highs, with April 2012 ending at an estimated 2.61 trillion cubic feet (Tcf), about 46 percent more than the same time last year. EIA’s average 2012 Henry Hub natural gas spot price forecast is $2.45 per million British thermal units (MMBtu), a decline of $1.55 per MMBtu from the 2011 average spot price. EIA expects that Henry Hub spot prices will average $3.17 per MMBtu in 2013.
- EIA expects electricity generation from coal to decline by about 15 percent in 2012 as generation from natural gas increases by about 24 percent. EIA forecasts that electricity generation from coal will increase by about 4 percent in 2013, as projected coal prices fall slightly while natural gas prices increase, allowing coal to regain some of its power generation share.