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EIA October 2013 Short Term Energy Outlook

November 13, 2013
By: Davis Michaelsen, Pro Farmer Inputs Monitor Editor

  • National average retail gasoline price adjusted 10 cents lower from last month for Q4 2013 at $3.24.
  • Brent crude price to decline gradually to average $103.00 per barrel in 2014.
  • WTI 2014 average crude oil price is projected at $95.00 per barrel.
  • Natural gas spot prices to average higher year-on-year at $3.84 in 2014.

 

The U.S. Energy Information Administration (EIA) released its October Short Term Energy Outlook (STEO) today. The report includes downward revisions from the September STEO for crude oil benchmark pricing and retail gasoline prices while natural gas pricing in 2014 is expected to rise to more than a dollar above 2012 prices.

October 2013 domestic crude oil production exceeded crude oil imports for the first time since February 1995. Increased U.S. crude production averaged 7.7 million barrels daily as national demand has faded seasonally, leading to robust supplies in storage. Both Brent and WTI crude oils are expected to range lower in 2014 with the Brent/WTI spread projected at an average of $8.00 per barrel.

As crude oil production has surged, gasoline prices have fallen across the nation, shedding a full dime in just the last month. The national average gasoline price is expected to fall from 2012's average of $3.63 to average $3.39 in 2014. Heating oil is expected to move slightly lower in the coming year, but current distillate stocks are very near the bottom of the five-year average as Gulf Coast refiners struggle to service demand from Latin America for distillate fuels. A shock to national stockpiles could easily inflate heating oil prices, and farm diesel with it.

Current natural gas inventories lie just below year-ago and just above the five-year average. EIA projects the 2014 natural gas annual average spot price to increase from 2013's $3.68 to $3.84. This increase is expected to spur electricity rates slightly higher, rising from 11.9 cents per kilowatt-hour in 2012 to 12.3 cents per kilowatt-hour in 2014.

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