The U.S. Department of Energy has lowered its projections for crude oil prices for the fourth quarter and expects diesel fuel to average $4 per gallon during the quarter. The agency is predicting crude oil to remain about the same in 2013, and diesel prices to be slightly lower.
The DOE's Energy Information Administration, in its monthly Short-Term Energy Outlook
released this week, projects that the West Texas Intermediate (WTI) crude oil price will average $89 per barrel in the fourth quarter of 2012, about $4 per barrel lower than in last months Outlook. WTI crude oil is forecasted to average $88 per barrel in 2013.
EIA expects U.S. total crude oil production to average 6.3 million barrels per day (bbl/d) in 2012, an increase of 0.7 million bbl/d from last year. Projected U.S. domestic crude oil production increases to 6.8 million bbl/d in 2013, the highest level of production since 1993Fuel prices
Diesel fuel retail prices rose from a monthly average of $3.83 per gallon in January 2012 to a high of $4.13 per gallon in March, and then fell to a low of $3.72 per gallon in July.
After rising again to an average of $4.12 per gallon in September, continued tight market conditions and strong global demand kept on-highway diesel fuel prices at an average of $4.09 per gallon in October.
EIA expects that on-highway diesel fuel retail prices will average $4.00 per gallon during the fourth quarter of this year and $3.83 per gallon in 2013.
U.S. regular gasoline retail prices began October 2012 at $3.80 per gallon and fell to $3.49 per gallon on November 5. Projected U.S. regular gasoline retail prices average $3.56 per gallon during the fourth quarter of 2012.
Hurricane Sandy, however, has contributed to higher wholesale gasoline prices on the East Coast, and the recovery schedule for affected refineries, pipelines, and distribution terminals contributes to uncertainty over the near-term price outlook.
EIA expects regular gasoline retail prices, which averaged $3.53 per gallon in 2011, to average $3.64 per gallon in 2012 and $3.44 per gallon in 2013.Natural Gas
The agency reports that working natural gas inventories are at a record high level. As of October 26, working inventories totaled 3,908 billion cubic feet (Bcf), which is 56 Bcf greater than the previous record high of 3,852 Bcf on November 18, 2011.
EIA expects the Henry Hub natural gas spot price, which averaged $4.00 per million British thermal units (MMBtu) in 2011, to average $2.77 per MMBtu in 2012 and $3.49 per MMBtu in 2013. (MMBtu is not the same thing as the diesel-gallon-equivalent price at the pump.)