The U.S. Energy Information Administration (EIA) said Thursday that it expects that the Brent crude oil spot price will average $102 per barrel over the second half of this year, and $100 per barrel in 2014, assuming there are no disruptions to energy markets arising from the recent unrest in Egypt.
Diesel prices will of course mirror whatever oil does, with some lag time in between.
After increasing to $119 per barrel in early February 2013, the Brent crude oil spot price fell to a low of $97 per barrel in mid-April and then recovered to an average of $103 per barrel in May and June, about the same as its average over the same two-month period last year.
The discount of West Texas Intermediate (WTI) crude oil to Brent crude oil, which averaged $18 per barrel in 2012 and increased to a monthly average of more than $20 per barrel in February 2013, fell to less than $5 per barrel in early July 2013. The narrowing of the WTI-Brent price spread is supported by several factors that have depressed Brent prices or raised WTI prices. EIA expects the WTI discount to widen to $8 per barrel by the end of 2013 as crude oil production in Alberta, Canada, recovers following the heavy June flooding and as Midcontinent production continues to grow.
Consumption in OECD (Organization for Economic Cooperation and Development) countries is expected to average 45.5 million barrels per day (bbl/d) in 2013 compared with 44.5 million bbl/d for non-OECD countries. EIA forecasts annual average non-OECD total liquids consumption to surpass OECD levels in 2014, averaging 45.9 million bbl/d and 45.4 million bbl/d, respectively.
EIA projects non-OPEC liquid fuels production will increase by 1.2 million bbl/d in 2013 and by 1.6 million bbl/d in 2014. North America accounts for most of the projected growth in non-OPEC supply over the next two years because of continued production growth from U.S. tight oil formations and Canadian oil sands.
U.S. crude oil production increased to an average of 7.3 million bbl/d in April and May, which is the highest level of production since 1992. EIA forecasts U.S. total crude oil production will average 7.3 million bbl/d in 2013 and 8.1 million bbl/d in 2014.
The Trucker staff can be reached to comment on this article at email@example.com.
Find more news and analysis from The Trucker, and share your thoughts, on Facebook.