The United States Energy Information Administration released its April Short-term Energy Outlook this week. March North sea Brent crude oil prices were $6 higher than the February average at $38/barrel. WTI and Brent crude are forecast to average $35/barrel in 2016 and $41 per barrel in 2017 -- each $1 higher than March projections.
Annual U.S. crude oil production is forecast 0.1 million barrels per day (mb/d) lower than last month's projections at 8.6 mb/d in 2016 and 8.0 mb/d in 2017. U.S. crude production in March declined 90,000 bpd from the February production average to 9.0 mb/d.
U.S. natural gas inventories ended the winter heating season at a record 2,478 billion cubic feet. At the end of March, natural gas inventories in the U.S. were 67% above year-ago and 53% above the five-year average supply. EIA lowered its natural gas spot price projections to $2.18/million British thermal units (MMBtu) in 2016, a decline of 7 cents from March's forecast and $3.02/MMBtu in 2017, steady with last month's projection.
Full text highlights from EIA follow or click here to view the full report...
Short-Term Energy Outlook
April 2016 Release
- During the 2016 April-through-September summer driving season, U.S. regular gasoline retail prices are forecast to average $2.04/gallon (gal), compared with $2.63/gal last summer. For all of 2016, the forecast average price is $1.94/gal, which if realized would save the average U.S. household about $350 on gasoline in 2016 compared with 2015, with annual average motor fuel expenditures at the lowest level in 12 years.
- North Sea Brent crude oil prices averaged $38/barrel (b) in March, a $6/b increase from February. Both Brent and West Texas Intermediate (WTI) crude oil prices are forecast to average $35/b in 2016 and $41/b in 2017. However, the current values of futures and options contracts suggest high uncertainty in the price outlook. For example, EIA's forecast for the average WTI price in July 2016 of $35/b should be considered in the context of Nymex contract values for July 2016 delivery that were traded during the five-day period ending April 7, suggesting that the market expects WTI prices to range from $27/b to $57/b (at the 95% confidence interval).
- U.S. crude oil production averaged an estimated 9.4 million barrels per day (b/d) in 2015. It is forecast to average 8.6 million b/d in 2016 and 8.0 million b/d in 2017, which are both 0.1 million b/d lower than forecast in last month's report. EIA estimates that crude oil production in March 2016 averaged 9.0 million b/d, 90,000 b/d below the February 2016 level.
- Natural gas inventories ended the winter heating season (March 31) at 2,478 billion cubic feet (Bcf), slightly above the previous end-of-March record high, set in 2012. End-of-March inventories were 67% above the level at the same time last year and 53% above the five-year average for that date. Henry Hub spot prices are forecast to average $2.18/million British thermal units (MMBtu) in 2016 and $3.02/MMBtu in 2017, compared with an average of $2.63/MMBtu in 2015.