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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U.S. EIA - Venezuela holds the largest oil reserves in the world, in large part because of the heavy oil reserves in the Orinoco Oil Basin. In addition to oil reserves, Venezuela has sizeable natural gas reserves, although the development of natural gas lags significantly behind that of oil. However, in the wake of political and economic instability in the country, crude oil production has dramatically decreased, reaching a multi-decades low in mid-2018.
U.S. BEA - The U.S. current-account deficit increased to $124.1 billion (preliminary) in the first quarter of 2018 from $116.1 billion (revised) in the fourth quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit was 2.5 percent of current-dollar gross domestic product (GDP) in the first quarter, up from 2.4 percent in the fourth quarter.
WNN - There are 126 operational power reactors in 14 EU Member States, providing more than one-quarter of the bloc's total electricity production. In its Communication on the Nuclear Illustrative Program (PINC) published last year, the European Commission expects nuclear to maintain its significant role in Europe's energy mix up to 2050. This would require investment of some EUR40-50 billion (USD46-58 billion) in nuclear LTO by 2050.
REUTERS - Benchmark Brent crude LCOc1 was up 50 cents at $75.58 a barrel by 0835 GMT. U.S. light crude CLc1 was 50 cents higher at $65.57.