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5/17/2013  EIA Short-term Energy Outlook


  • Falling crude oil prices contributed to a decline in the U.S. regular gasoline retail price from a year-to-date high of $3.78 per gallon on February 25 to $3.52 per gallon on April 29. EIA expects the regular gasoline price will average $3.53 per gallon over the summer (April through September), down $0.10 per gallon from last month's STEO. The annual average regular gasoline retail price is projected to decline from $3.63 per gallon in 2012 to $3.50 per gallon in 2013 and to $3.39 per gallon in 2014. Energy price forecasts are highly uncertain, and the current values of futures and options contracts suggest that prices could differ significantly from the projected levels.
  • After increasing to $119 per barrel in early February 2013, the Brent crude oil spot price fell to a low of $97 per barrel in mid-April 2013 and then recovered to $105 per barrel on May 3. EIA expects that the Brent crude oil spot price will average $104 per barrel over the second half of 2013 and $101 per barrel in 2014. The projected discount of West Texas Intermediate (WTI) crude oil to Brent, which increased to a monthly average of more than $20 per barrel in February 2013, fell to below $9 per barrel in April. EIA expects the discount to increase in the near term and average $13 per barrel in 2013 and $9 per barrel in 2014.
  • Natural gas working inventories ended April 2013 at an estimated 1.82 trillion cubic feet (Tcf), about 0.80 Tcf below the level at the same time a year ago and 0.13 Tcf below the five-year average (2008-12). EIA expects the Henry Hub natural gas spot price, which averaged $2.75 per million British thermal units (MMBtu) in 2012, will average $3.80 per MMBtu in 2013 and $4.00 per MMBtu in 2014, about 27 cents per MMBtu and 40 cents per MMBtu higher than forecast in last month's STEO, respectively.
  • The projected increasing cost of natural gas relative to coal contributes to higher levels of electricity generation from coal. The share of total generation fueled by coal is forecast to increase from 37.4 percent in 2012 to 40.1 percent in 2013. Conversely, the share of generation fueled by natural gas declines from 30.4 percent in 2012 to 27.8 percent in 2013.