EIA: Brent spot prices fell outside the $5/bbl range in August

Sept. 9, 2014
According to the US Energy Information Administration’s most recent Short-Term Energy Outlook (STEO), weakening global demand and growing Libyan oil exports drove down North Sea Brent crude oil spot prices to an average of $102/bbl in August, $5/bbl lower than the July average and $10/bbl below the average in June.

According to the US Energy Information Administration’s most recent Short-Term Energy Outlook (STEO), weakening global demand and growing Libyan oil exports drove down North Sea Brent crude oil spot prices to an average of $102/bbl in August, $5/bbl lower than the July average and $10/bbl below the average in June.

August was then the first in 13 consecutive months in which average Brent crude oil spot prices fell outside the relatively narrow range of $107/bbl to $112/bbl. The forecast Brent crude oil price averages $106/bbl in 2014, and $103/bbl in 2015, both $2/bbl lower than in last month’s STEO.

The average West Texas Intermediate crude oil spot price fell to $97/bbl in August from $106/bbl in June. After falling to an annual low of $3/bbl in July, the discount of WTI crude oil to Brent crude oil increased to $5/bbl in August. The discount of WTI to Brent is forecast to widen from current levels, averaging $10/bbl in this year’s fourth quarter and $8/bbl in 2015.

US regular gasoline retail prices fell to an average $3.49/gal in August, driven in large part by falling crude prices. EIA projects US regular gasoline retail prices to continue to decline to an average $3.18/gal in December, 12¢ lower than projected in last month’s STEO.

In the September outlook, EIA has revised upwards the total 2013 US petroleum and other liquids consumption by 74,000 b/d to 18.96 million b/d. With this revision, consumption is expected to fall slightly, by 0.2%, in 2014. A year-over-year increase in total consumption of 170,000 b/d during the first quarter is expected to be more than offset by an average 150,000 b/d decline during this year’s second half. Total consumption is forecast to rise by 150,000 b/d in 2015 to average 19.08 million b/d, an increase of 100,000 b/d from last month’s STEO.

EIA forecasts total US crude oil production to increase from an estimated 7.45 million b/d in 2013 to 8.53 million b/d in 2014 and 9.5 million b/d in 2015. The 2014 and 2015 forecasts are 70,000 b/d and 250,000 b/d higher, respectively, than in last month’s STEO.

Petroleum imports continue to decline and the share of total US liquid fuels consumption met by net imports is expected to decline to 21% in 2015—the lowest level seen since 1968.