The U.S. Energy Department has revised upward its forecast for fuel prices, according to its latest Short Term Energy Outlook.
Diesel fuel prices, which averaged $3.92 per gal in 2013, are projected to average $3.85 this year and $3.78 in 2015. That’s up two cents and five cents, respectively, from its projection a month ago.
The price of diesel is also forecast to continue moving lower as 2014 progresses, dropping from an expected average of $3.95 in the current quarter to $3.76 in the fourth quarter.
Regular gasoline retail prices, which fell from $3.63 per gallon in 2012 to an average of $3.51 in 2013, will continue to fall to $3.45 this year and $3.37 in 2015, nearly unchanged from last month’s outlook
The reason for the declines, says the department, is crude oil prices are projected to move slightly lower, though not as much as called for earlier.
The average West Texas Intermediate crude oil price, which fell to $95 per barrel in January 2014, increased to $101 in February as a result of strong Midwestern refinery runs after cold-weather-related disruptions in January. The forecast calls for it to average $95 this year, $2 higher than last month's outlook, and $90 during 2015.
Brent crude oil prices in February averaged between $108 and $112 per barrel for the eighth consecutive month. DOE expects the Brent crude oil price to weaken as non-OPEC supply growth exceeds growth in world consumption. The Brent crude oil price is projected to average $105 per barrel and $101 per barrel in 2014 and 2015, respectively.
Growth in domestic crude oil production is expected to continue contributing to a decline in imports. The share of total U.S. liquid fuels consumption met by net imports peaked at more than 60% in 2005 and fell to an average of 33% in 2013. DOE expects the net import share to decline to 25% in 2015, which would be the lowest level since 1971.