Total US crude oil production in 2015 will reach its highest level since 1972, the US Energy Information Administration forecasts in its Short-Term Energy Outlook (STEO) released June 10. Production, which averaged 7.4 million b/d in 2013, is expected to average 8.4 million b/d in 2014 and 9.3 million b/d in 2015.
Additionally, EIA estimates that US total crude production during May averaged nearly 8.4 million b/d—the highest monthly average production since March 1988.
With the Atlantic hurricane season commencing June 1, EIA believes production will be minimally disrupted, relying on the National Oceanic and Atmospheric Administration’s prediction that the Atlantic Basin will likely experience near normal or below-normal tropical weather through Nov. 30.
Mean estimates of shut-in production by EIA in the federal Gulf of Mexico during that period total 12 million bbl of crude oil and 30 bcf of natural gas. During last year’s hurricane season—the first season without a major hurricane since 1994—shut-ins to gulf production halted only 3.1 million bbl of crude oil and 6.7 bcf of gas.
EIA, however, estimates a 69% probability of production shut-in volumes matching or exceeding those numbers.
Oil, gas prices
Meanwhile, in the North Sea, Brent crude oil spot prices increased from a monthly average of $108/bbl in April to $110/bbl in May, EIA said. This was the 11th consecutive month in which the average Brent crude oil spot price fell within a relatively narrow range of $107-112/bbl.
The discount of West Texas Intermediate crude to Brent, which averaged more than $13/bbl from November through January, fell below $4/bbl in early April before increasing to an average of $7/bbl in May.
EIA projects Brent crude prices to average $108/bbl in 2014 and $102/bbl in 2015, and the WTI discount to Brent to average $9/bbl and $11/bbl in 2014 and 2015, respectively.
Natural gas working inventories on May 30 totaled 1,500 bcf, 740 bcf below the level at the same time a year ago and 900 bcf below the previous 5-year average during 2009-13. EIA expects that spot gas prices at Henry Hub, which averaged $3.73/MMbtu in 2013, will average $4.74/MMbtu in 2014, and $4.49/MMbtu in 2015.
During the April-through-September summer driving season this year, regular gasoline retail prices are forecast to average $3.62/gal, 4¢ higher than last year.
The projected monthly national average regular gasoline retail price falls from the high this year of $3.67/gal in May to $3.54/gal in September. EIA expects regular gasoline retail prices to average $3.50/gal in 2014 and $3.38/gal in 2015, compared with $3.51/gal in 2013.