The market's perception of reduced risk to Iraqi oil exports and news regarding increasing Libyan oil exports contributed to a drop in the Brent crude oil spot price to an average of US$ 107 per barrel (bbl) in July, US$ 5/bbl lower than the June average.
EIA projects Brent crude oil prices to average US$ 107/bbl over the second half of 2014 and US$ 105/bbl in 2015. West Texas Intermediate (WTI) crude oil prices fell from an average of US$ 106/bbl in June to US$ 104/bbl in July, despite record levels of US demand for crude oil. The WTI discount to Brent, which averaged US$ 11/bbl in 2013, is expected to average USUS$ 8/bbl and US$ 9/bbl in 2014 and 2015, respectively, both US$ 1/bbl lower than projected in last month's STEO.
Regular gasoline retail prices fell to an average of US$ 3.61 per gallon (gal) in July, 8 cents/gal below the June average. Regular gasoline retail prices are projected to continue to decline to an average of US$ 3.30/gal in December. EIA expects regular gasoline retail prices to average US$ 3.50/gal in 2014 and US$ 3.46/gal in 2015, compared with US$ 3.51/gal in 2013.
US total crude oil production averaged an estimated 8.5 million barrels per day (bpd) in July, the highest monthly level of production since April 1987. US total crude oil production, which averaged 7.5 million bpd in 2013, is expected to average 8.5 million bpd in 2014 and 9.3 million bpd in 2015. The 2015 forecast represents the highest annual average level of oil production since 1972.
Natural gas plant liquids production increases from an average of 2.6 million bpd in 2013 to 3.1 million bpd in 2015. The growth in domestic production has contributed to a significant decline in petroleum imports. The share of total US petroleum and other liquids consumption met by net imports fell from 60% in 2005 to an average of 33% in 2013. EIA expects the net import share to decline to 22% in 2015, which would be the lowest level since 1970.
Natural gas spot prices fell from US$ 4.47/million British thermal units (MMBtu) at the beginning of July to US$ 3.78/MMBtu at the end of the month as natural gas stock builds continued to outpace historical norms. Natural gas working inventories on August 1 totalled 2.39 trillion ft3, 0.54 trillion ft3 (18%) below the level at the same time a year ago and 0.61 trillion ft3 (20%) below the previous five-year average (2009-13). Projected natural gas working inventories reach 3.46 trillion ft3 at the end of October, 0.35 trillion ft3 below the level at the same time last year. EIA expects that the Henry Hub natural gas spot price, which averaged US$ 3.73 per MMBtu in 2013, will average US$ 4.46/MMBtu in 2014 and US$ 4.00/MMBtu in 2015, US$ 0.31/MMBtu and US$ 0.51/MMBtu lower than in last month's STEO, respectively.
Source: Energy Information Administration.
Edited by Katie Woodward
Read the article online at: https://www.oilfieldtechnology.com/exploration/13082014/eia-august-2014-short-term-energy-outlook-1257/