Forecast Highlights

Global liquid fuels

• Brent crude oil spot prices averaged $81 per barrel (b) in October, up $2/b from September. Despite the increase in monthly average prices, Brent spot prices declined from $85/b on October 1 to $75/b on October 31.

• EIA expects Brent spot prices will average $72 in 2019 and that West Texas Intermediate (WTI) crude oil prices will average about $7/b lower than Brent prices next year. NYMEX WTI futures and options contract values for February 2019 delivery that traded during the five-day period ending November 1, 2018, suggest a range of $53/b to $83/b encompasses the market expectation for February WTI prices at the 95% confidence level.

• EIA estimates that U.S. crude oil production averaged 11.4 million barrels per day (b/d) in October, down slightly from September levels because of hurricane-related outages in the Gulf of Mexico. EIA expects that U.S. crude oil production will average 10.9 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 12.1 million b/d in 2019.

• U.S. regular gasoline retail prices averaged $2.86 per gallon (gal) in October, an increase of 2 cents/gal from the average in September, marking the sixth consecutive month that U.S. prices averaged between $2.85/gal and $2.90/gal. EIA forecasts the average U.S. regular gasoline retail price will fall to $2.57/gal in December 2018. EIA forecasts that regular gasoline retail prices will average $2.75/gal in 2018 and in 2019.

• EIA forecasts total global liquid fuels inventories will remain flat in 2018, followed by an increase of 0.6 million b/d in 2019.

Natural Gas

• EIA estimates dry natural gas production in the United States averaged 86.9 billion cubic feet per day (Bcf/d) in October, up 0.7 Bcf/d from September. EIA forecasts that dry natural gas production will average 83.2 Bcf/d in 2018, up 8.5 Bcf/d from 2017. Both the level and growth of natural gas production in 2018 would establish new records. EIA expects natural gas production will continue to rise in 2019 to an average of 89.6 Bcf/d.

• EIA estimates that U.S. natural gas storage inventories were 3.2 trillion cubic feet (Tcf) at the end of October. This level was 16% lower than both the 2017 end-of-October level and the five-year (2013–17) average for the end of October and was the lowest end-of-October level since 2005.

• Despite low storage levels, EIA expects strong growth in U.S. natural gas production to put downward pressure on prices in 2019. EIA expects Henry Hub natural gas spot prices to average $2.98/million British thermal units (MMBtu) in 2019, down 4 cents from the 2018 average and down from a forecast average price of $3.25/MMBtu in the fourth quarter of 2018. NYMEX futures and options contract values for February 2019 delivery traded during the five-day period ending November 1, 2018, suggest a range of $2.06/MMBtu to $4.94/MMBtu encompasses the market expectation for February Henry Hub natural gas prices at the 95% confidence level.