Good energy news is headed your way for 2013. On-highway diesel prices averaged $4/gal. in November, but are projected to average $3.84/gal. for all of 2013, according to the December 2012 short-term outlook by the U.S. Energy Information Agency (EIA).
Farm prices are lower than that, with taxes subtracted, which vary by state. Contributing to the diesel drop is an anticipated decline in Brent crude oil prices of $104/barrel in 2013, $8/barrel cheaper than 2012. Crude prices are forecast to drop from $107/barrel in January to $103 by June 2013. For each $1 change in crude oil prices, diesel fuel costs change 2.4 cents per gallon.
For liquid fuels overall, EIA forecasts consumption unchanged in 2013, despite higher assumed growth in U.S. real disposable income and lower prices. That’s because of continued slow growth in the driving-age population, improvements in the average fuel economy of new vehicles, and increased rates of retirement of older, less-fuel-efficient vehicles.
Natural gas inventories are very strong going into winter, but EIA projects higher prices for 2013 though still relatively low: $3.68 per million BTU for 2013 versus $2.78 per million BTU for 2012. For propane, prices for the winter of 2012/13 are forecast to be 1.9% lower than the previous winter, higher in the Northeast, no change in the West, and lower in the Midwest and South.