With crude oil prices higher, EIA has increased the average regular gasoline retail price forecast for the third quarter of 2012 to $3.49 per gallon, it said in the Aug. 7 issue of its Short-Term Energy Outlook. Last month’s Outlook had forecast an average retail price for regular of $3.39 per gallon.
EIA expects regular gasoline retail prices, which averaged $3.53 per gallon in 2011, to hold steady at the same average, $3.53 per gallon, in 2012 and to decrease to $3.33 per gallon in 2013.
EIA expects U.S. total crude oil production 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. Projected U.S. domestic crude oil production is expected to increase to 6.7 million bbl/d in 2013, according to Outlook.
EIA projects that 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. In the EIA’s latest forecast the Brent crude oil spot price falls to an average of $100 per barrel in 2013. The projected West Texas Intermediate (WTI) crude oil spot price discount to Brent crude oil narrows from about $14 in the third quarter of 2012 to $9 by late 2013. These price forecasts assume that world oil-consumption-weighted real gross domestic product (GDP), which increased by 3.0 percent in 2011, grows by 2.8 percent in 2012 and 2.9 percent in 2013.
As a result of drought conditions affecting corn harvests and prices throughout the Midwest, ethanol production fell from 920,000 bbl/d for the week ending June 8, 2012, to 809,000 bbl/d for the week ending July 27, 2012. EIA has reduced its 2012 ethanol production forecast from 900,000 bbl/d (13.8 billion gallons) in last month's Outlook to 870,000 bbl/d (13.3 billion gallons). EIA expects ethanol production to recover in the second half of 2013, averaging about 880,000 bbl/d for the year.