The U.S. Department of Energy predicts that domestic crude oil production next year will reach its highest annual average rate of production since 1992 and diesel prices will average less than $4 per gallon in 2013.
The DOE's Energy Information Administration, in its monthly forecast, expects West Texas Intermediate crude oil spot price will average $89 per barrel for 2012 and $88 per barrel in 2013.
This forecast rests on the assumption that U.S. real gross domestic product grows by 2.1% in 2012 and 1.8% in 2013, while world oil‐consumption‐weighted real GDP grows by 2.7% and 2.4% in 2012 and 2013, respectively.
The EIA believes diesel fuel retail prices will average $4.02 per gallon during the fourth quarter of 2012 before falling to an average of $3.84 per gallon in 2013.
On-highway diesel fuel retail prices averaged $4.09 per gallon in October 2012, and continued tight market conditions and strong global demand kept on-highway diesel fuel prices at an average of $4 per gallon in November. EIA expects that on-highway diesel fuel retail prices will average $3.97 per gallon in 2012 and $3.84 per gallon in 2013.
Projected national average regular gasoline retail prices average $3.63 per gallon in 2012 and $3.43 per gallon in 2013, compared with $3.53 per gallon in 2011.
EIA expects U.S. total crude oil production to average 6.4 million barrels per day (bbl/d) in 2012, an increase of 0.8 million bbl/d from the previous year. Projected domestic crude oil production increases to 7.1 million bbl/d in 2013, 0.2 million bbl/d higher than projected in last months STEO and the highest annual average rate of production since 1992.
The agency also predicts that natural gas spot prices will rise next year. Although that doesn't correspond to pump price for compressed or liquified natural gas for vehicles, it could mean some more work for natural gas drilling operations, which have slacked back this year due to a glut of natural gas and near-record-low prices.
For natural gas, EIA expects the Henry Hub natural gas spot price, which averaged $4.00 per million British thermal units (MMBtu) in 2011, will average $2.78 per MMBtu in 2012 and $3.68 per MMBtu in 2013.