WASHINGTON — With crude oil prices going higher, the U.S. Energy Information Administration (EIA) has increased the average regular gasoline retail price forecast for the third quarter to $3.49 per gallon, 10 cents higher than last month’s Short-Term Energy Outlook.
EIA expects regular gasoline retail prices to average $3.53 per gallon in 2012 and $3.33 per gallon in 2013.
The Brent crude oil spot price will average about $103 per barrel during the second half of 2012, about $3.50 per barrel higher than in last month’s Outlook, and is forecast to fall to an average of $100 per barrel in 2013. The projected West Texas Intermediate (WTI) crude spot oil price discount to Brent crude oil narrows from about $14 in third-quarter 2012 to $9 by late 2013, assuming certain gross domestic product (GDP) growth.
U.S. total crude oil production is expected to average 6.3 million barrels per day (bbl/d) in 2012, an increase of 0.6 million bbl/d from last year, and the highest level of production since 1997. Production increases to 6.7 million bbl/d in 2013, EIA forecasts.
Drought conditions affecting corn harvests and prices throughout the Midwest pushed ethanol production lower, and EIA has reduced its 2012 forecast to 870,000 bbl/d, or 13.3 billion gallons. But the agency expects production to recover in the second half of 2013.
Natural gas working inventories ended July at an estimated 3.2 trillion cubic feet (Tcf), about 17% above the same time last year. EIA expects the Henry Hub natural gas spot price, which averaged $4 per million British thermal units (MMBtu) in 2011, to average $2.67 per MMBtu in 2012 and $3.34 per MMBtu in 2013.