The U.S. Energy Information Administration recently provided a short-term outlook regarding a couple of key factors impacting oil and gas prices:
- North Sea Brent crude oil prices averaged $42/barrel (b) in April, a $3/b increase from March. Improving economic data, growing supply disruptions and falling U.S. crude oil production and rig counts contributed to the price increase.
- Brent crude oil prices are forecast to average $41/b in 2016 and $51/b in 2017, $6/b and $10/b higher than forecast in last month.
- West Texas Intermediate (WTI) crude oil prices are forecast to average slightly less than Brent in 2016 and to be the same as Brent in 2017. However, the current values of futures and options contracts suggest high uncertainty in the price outlook.
- During the April-through-September summer driving season of 2016, U.S. regular gasoline retail prices are forecast to average $2.21/gallon (gal), 17 cents/gal higher than forecast in last month, but 42 cents/gal lower than last summer.
- U.S. regular gasoline retail prices are forecast to average $2.08/gal in 2016 and $2.24/gal in 2017, 14 cents/gal higher and 24 cents/gal higher than forecast in last month, respectively.
- U.S. crude oil production averaged 9.4 million barrels per day (b/d) in 2015. Production is forecast to average 8.6 million b/d in 2016 and 8.2 million b/d in 2017. The 2017 forecast is about 0.1 million b/d higher than forecast in the April STEO.
- EIA estimates that crude oil production for the month of April 2016 averaged 9.0 million b/d, which is 0.1 million b/d below the March 2016 level, and 0.7 million b/d below the 9.7 million b/d level reached in April 2015.
- Natural gas working inventories were 49 percent higher than a year earlier and 47 percent higher than the previous five-year average.
- EIA projects natural gas inventories will be the highest end-of-October level on record.
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