EIA projects that the Brent crude oil spot price, which averaged $112 per barrel in 2012, will fall to an average of $105 per barrel in 2013 and $99 per barrel in 2014.
The projected discount of West Texas Intermediate crude oil to Brent, which averaged $18 per barrel in 2012, falls to an average of $16 per barrel in 2013 and $8 per barrel in 2014, as planned new pipeline capacity lowers the cost of moving Mid-continent crude oil to the Gulf Coast refining centers.
EIA expects that falling crude prices will help national average regular gasoline retail prices fall from an average $3.63 per gallon in 2012 to annual averages of $3.44 per gallon and $3.34 per gallon in 2013 and 2014, respectively.
Diesel fuel retail prices averaged $3.97 per gallon during 2012 and are forecasted to fall to an average of $3.87 per gallon in 2013 and $3.78 per gallon in 2014.
It is estimated that U.S. total crude oil production averaged 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 continues to increase to 7.3 million bbl/d in 2013 and 7.9 million bbl/d in 2014, which would mark the highest annual average level of production since 1988.
EIA expects oil markets to loosen in 2013 and 2014 as increasing global supply more than offsets higher global consumption.
Projected world supply increases by 1 million bbl/d in 2013 and 1.7 million bbl/d in 2014, with most of the growth coming from outside the Organization of the Petroleum Exporting Countries (OPEC).
North America will account for much of this growth. Projected world liquid fuels consumption grows by an annual average of 0.9 million barrels per day (bbl/d) in 2013 and 1.3 million bbl/d in 2014. Countries outside the Organization for Economic Cooperation and Development (OECD) drive expected consumption growth.