BRENT PRICE 2015: $103/BBL
Driven in large part by falling crude oil prices, U.S. regular gasoline retail prices fell to an average of $3.49/per gallon (gal) in August, 12 cents below the July average and 21 cents below the average in June. U.S. regular gasoline retail prices are projected to continue to decline to an average of $3.18/gal in December, 12 cents lower than projected in last month's STEO. EIA expects U.S. regular gasoline retail prices, which averaged $3.51/gal in 2013, to average $3.46/gal in 2014 and $3.41/gal in 2015, 4 cents lower and 6 cents lower than last month's STEO, respectively.
Weakening global demand and increased Libyan oil exports contributed to a drop in the North Sea Brent crude oil spot price to an average of $102 per barrel (bbl) in August, $5/bbl lower than the July average and $10/bbl below the average in June. For the first time in 14 months, average Brent spot prices fell outside the relatively narrow $5/bbl range between $107/bbl and $112/bbl. EIA projects that Brent crude oil prices will average $103/bbl in fourth-quarter 2014 and $103/bbl in 2015, $5/bbl and $2/bbl lower than forecast in last month's STEO, respectively. The WTI discount to Brent, which averaged $11/bbl in 2013, is expected to average $8/bbl in both 2014 and 2015.
Total U.S. crude oil production averaged an estimated 8.6 million barrels per day (bbl/d) in August, the highest monthly production since July 1986. Total crude oil production, which averaged 7.5 million bbl/d in 2013, is expected to average 9.5 million bbl/d in 2015, 0.2 million bbl/d higher than projected in last month's STEO. If achieved, the 2015 forecast would be the highest annual average crude oil production since 1970. Natural gas plant liquids production increases from an average of 2.6 million bbl/d in 2013 to 3.1 million bbl/d in 2015. The growth in domestic liquids production has contributed to a significant decline in petroleum imports. The share of total U.S. petroleum and other liquids consumption met by net imports fell from 60% in 2005 to an average of 32% in 2013. EIA expects the net import share to decline to 21% in 2015, which would be the lowest level since 1968.
Natural gas spot prices fell 15% from an average of $4.59/million British thermal units (MMBtu) in June to $3.91/MMBtu in August even as natural gas stock builds continued to outpace historical norms. Natural gas working inventories on August 29 totaled 2.71 trillion cubic feet (Tcf), 0.47 Tcf (15%) below the level at the same time a year ago and 0.50 Tcf (15%) below the previous five-year average (2009-13). Projected natural gas working inventories reach 3.48 Tcf at the end of October, 0.34 Tcf below the level at the same time last year. EIA expects that the Henry Hub natural gas spot price, which averaged $3.73 per MMBtu in 2013, will average $4.46/MMBtu in 2014 and $3.87/MMBtu in 2015.
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BP and its partners in Azerbaijan's giant ACG oil production complex agreed Thursday to extend the production sharing contract by 25 years to 2049 and to increase the stake of state-owned SOCAR, reducing the size of their own shares.
The U.S. current-account deficit increased to $123.1 billion (preliminary) in the second quarter of 2017 from $113.5 billion (revised) in the first quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.4 percent in the first quarter.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading up 41 cents, or 0.8 percent, at $50.30 by 0852 GMT, near the three-month high of $50.50 it reached last Thursday. Brent crude futures LCOc1, the benchmark for oil prices outside the United States, were at $55.91 a barrel, up 29 cents, and also not far from the near five-month high of $55.99 touched on Thursday.
“The principal risk regarding Russian and Chinese activities in Venezuela in the near term is that they will exploit the unfolding crisis, including the effect of US sanctions, to deepen their control over Venezuela’s resources, and their [financial] leverage over the country as an anti-US political and military partner,” observed R. Evan Ellis, a senior associate in the Center for Strategic and International Studies’ Americas Program.