December was the sixth consecutive month in which monthly average Brent prices decreased, falling $17/barrel (bbl) from November to a monthly average of $62/bbl, the lowest since May 2009. The December price decline reflects continued growth in U.S. tight oil production, strong global supply, and weakening outlooks for the global economy and oil demand growth.
EIA forecasts that Brent crude oil prices will average $58/bbl in 2015 and $75/bbl in 2016, with annual average West Texas Intermediate (WTI) prices expected to be $3/bbl to $4/bbl below Brent. The current values of futures and options contracts suggest very high uncertainty in the price outlook. WTI futures contracts for April 2015 delivery, traded during the five-day period ending January 8, averaged $51/bbl, establishing the lower and upper limits of the 95% confidence interval for the market's expectations of monthly average WTI prices in April 2015 at $34/bbl and $76/bbl, respectively. The 95% confidence interval for market expectations widens considerably over time, with lower and upper limits of $28 and $112 for prices in December 2015.
Total U.S. crude oil production averaged an estimated 9.2 million barrels per day (bbl/d) in December. Forecast total crude oil production averages 9.3 million bbl/d in 2015. Under EIA's price forecast, projected crude oil production averages 9.5 million bbl/d in 2016, which would be the second-highest annual average level of production in U.S. history; the highest was 9.6 million bbl/d in 1970.
Driven largely by falling crude oil prices, U.S. weekly regular gasoline retail prices averaged $2.14/gallon (gal) on January 12, the lowest since May 4, 2009. U.S. regular gasoline retail prices are projected to average $2.16/gal in the first quarter of 2015. EIA expects U.S. regular gasoline retail prices, which averaged $3.36/gal in 2014, to average $2.33/gal in 2015. The average household is now expected to spend about $750 less for gasoline in 2015 compared with last year because of lower prices. The projected regular gasoline retail price increases to an average of $2.72/gal in 2016.
Natural gas working inventories on January 2 totaled 3.09 trillion cubic feet (Tcf), 0.25 Tcf (9%) above the level at the same time a year ago and 0.07 Tcf (2%) below the previous five-year average (2010-14). EIA expects the Henry Hub natural gas spot price to average $3.52/million British thermal units (MMBtu) this winter compared with $4.51/MMBtu last winter, reflecting both lower-than-expected space heating demand and higher natural gas production this winter. Turning to annual measures, EIA expects the Henry Hub natural gas spot price to average $3.44/MMBtu in 2015 and $3.86/MMBtu in 2016, compared with $4.39/MMBtu in 2014.
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Saudi Arabia is considering delaying the international portion of the giant initial public offering of its state oil company until at least 2019, according to people familiar with the situation, who said a domestic share sale in Riyadh could still happen next year.
But we expect a rise in the sector's NPL ratio and muted credit demand in the second half of 2017 and 2018, reflecting the slowing economy. GDP growth slowed to 1.4% in 2016 from 3.4% in 2015 and we expect it to be below 1% in 2017 and 2018.
The Organization of Petroleum Exporting Countries and allies including Russia have been cutting oil production this year to bring fuel inventories in industrialized nations back in line with the five-year average.
The Japanese government will offer $10 billion to support firms bidding to build liquefied natural gas (LNG) infrastructure around Asia, the Nikkei business daily said on Monday.