If you have been enjoying the recent drop in fuel prices, expect it to continue into next year, according to the U.S. Energy Department’s latest Short Term Energy Outlook.
Diesel fuel prices, which averaged $3.92 per gallon in 2013, are projected to fall to $3.89 for this year, 4 cents lower than projected in last month's report, and $3.87 in 2015.
Regular gasoline retail prices fell to an average of $3.61 per gallon in July, 8 cents below the June average. Regular gasoline retail prices are projected to continue to decline to an average of $3.30 per gallon in December. The DOE expects regular gasoline retail prices to average $3.50 per gallon in 2014 and $3.46 per gallon in 2015, compared with $3.51 in 2013.
This week diesel hit its lowest price since July 2013, falling for the eighth consecutive week to $3.821 per gallon, while gasoline fell for the seventh consecutive week to $3.454, its lowest level since February.
The drop in fuel prices also comes as consumption of distillate fuel, which includes diesel, is expected to show an increase of 140 million barrels per day this year and an expected increase of 70 million barrels per day in 2015.
Gasoline consumption is forecast to grow much less this year, 40,000 barrels per day and just 10,000 barrels per day next year.
The lesser rates for both are being attributed to improvements in the fuel economy for both diesel and gasoline powered vehicles.
Part of the reason for the expected decrease in fuel prices is due to lower projected prices for both kinds of popular crude oil, West Texas Intermediate and Brent, including the difference in prices of the usually higher priced Brent crude.
Also U.S. crude oil production in July reached its highest monthly level since 1987 during July at 8.5 million barrels per day. The average for next year is projected to be even higher at 9.3 million barrels per day in 2015, with the department noting increased domestic production has contributed to a significant decline in foreign oil imports with liquid fuel net import consumption expected to fall to its lowest level since 1970 next year.
The full report, including tables and charts, is available from the DOE website.