DOE Lowers 2015 Diesel-Price Forecast to $2.86
The Department of Energy lowered its 2015 forecast for U.S. diesel prices 2 cents to $2.86 a gallon but held its 2016 projection at $3.03.
Gasoline’s average price is projected to average $2.48 a gallon in 2015, a 4-cent rise from last month’s forecast, DOE’s Energy Information Administration said in its monthly short-term energy outlook released July 7.
The motor fuel will average $2.55 per gallon next year, a 1-cent rise from last month’s projection.
U.S. gasoline demand is projected to climb 1.9% to 9.09 million barrels a day this year because of rising employment and lower prices, according to the report. Consumption is projected to slip by 0.2% in 2016.
“U.S. gasoline demand will top 9 million barrels a day this year for the first time since 2007, which reflected record highway travel,” EIA Administrator Adam Sieminski said.
U.S. crude-oil production will climb to a 45-year high in 2015 before slipping next year. U.S. output will advance 8.6% to 9.47 million barrels a day this year, the most since 1970, EIA said July 7.
Monthly output declined in May and is expected to continue moving lower through early 2016.
“While U.S. crude-oil production is expected to decline over the months ahead, total output in 2015 is on track to be the highest in 45 years,” Sieminski told Bloomberg News in an e-mailed statement.
Horizontal drilling and hydraulic fracturing, or fracking, have unlocked supplies in shale formations in North Dakota, Texas and other states. The number of active oil rigs in the United States rose by 12 to 640 last week, ending the longest decline on record, according to data compiled by Baker Hughes. The number of active rigs is down 59% from November.
West Texas Intermediate, the U.S. benchmark oil, will average $55.51 a barrel this year versus the June projection of $55.35, the report showed. Prices will average $62.04 next year.
WTI dropped 46% last year as supply grew. Prices fell 0.4% to $52.33 a barrel July 7, the lowest settlement since April 13.
“The forecast decline in U.S. monthly oil production through early 2016 is the result of low oil prices, which pushed oil companies to reduce the investment in drilling that resulted in the lowest number of rigs drilling for oil in nearly five years,” Sieminski said.
EIA reduced its 2015 Brent crude estimate to $60.22 from $60.53. The European benchmark will average $67.04 next year, the agency said.
