EIA: Low gasoline prices are pushing US summer use to record levels
In its Short-Term Energy Outlook, which is released each month, the EIA said that demand will average a record 9.5 MMbbl during 2Q and 3Q, which is up from 9.48 MMbbl in May. The country’s driving season usually peaks between the Memorial Day holiday in May and Labor Day in September. According to the EIA, average summer retail prices for gasoline are forecast at $2.27/gal, down from $2.63/gal during the 2015 summer driving season.
Despite price increase and estimates that the market is coming into balance, crude oil is still worth less than half its peak in mid-2014. The EIA raised its crude price forecasts as declining US output and unplanned global disruptions limit supply while demand grows.
US production is expected to drop from 9.43 MMbpd in 2015 to 8.6 MMbpd this year and 8.19 MMbpd in 2017, which is unchanged from last month’s report, the EIA said.
West Texas Intermediate (WTI) crude will average $42.83/bbl, and prices will average $51.82/bbl in 2017, which is higher than the previous forecast of $50.65/bbl. WTI is now hovering around $50/bbl.
Brent crude, the benchmark for more than half the world’s oil, is projected to average $43.03/bbl this year, up from the prior estimate of $40.52/bbl, according to the EIA, which estimated that prices will average $51.82/bbl in 2017.
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