After falling by more than 40 cents per gallon from the beginning of September through mid-November, weekly U.S. average regular gasoline retail prices increased by 8 cents per gallon to reach $3.27 per gallon on December 2, 2013, according to the Energy Information Administration (EIA). The increase was due to a combination of unplanned refinery maintenance and higher crude oil prices, EIA reports in its Dec. 10 Short-Term Energy Outlook.
The annual average regular gasoline retail price, which was $3.63 per gallon in 2012, is expected to average $3.50 per gallon in 2013 and $3.43 per gallon in 2014.
The North Sea Brent crude oil spot price averaged near $110 per barrel for the fifth consecutive month in November. EIA expects the Brent crude oil price to average $108 per barrel in December and decline gradually to $104 per barrel in 2014. Projected West Texas Intermediate (WTI) crude oil prices average $95 per barrel during 2014.
The discount of the WTI crude oil spot price to Brent, which averaged more than $20 per barrel in February 2013 and fell below $4 per barrel in July, recovered to an average of $9 per barrel in October and $14 per barrel in November. In addition, the spot discount of Light Louisiana Sweet (LLS), a key Gulf Coast light sweet crude oil, to Brent increased from an average of $3 per barrel in September to almost $11 per barrel in November. The opening of a large LLS discount to Brent and the increasing convergence of LLS and WTI prices result from pipeline expansions and reversals that have reduced bottlenecks in the Midcontinent, continuing growth in domestic light oil production, and a seasonal decline in crude oil runs at U.S. Gulf Coast refineries. Brent crude oil prices continue to be supported by ongoing supply outages in Libya and tightness in global light crude oil markets. EIA expects the WTI discount to Brent to average $12 per barrel during the fourth quarter of 2013 and $9 per barrel in 2014.
Estimated U.S. crude oil production averaged 8.0 million barrels per day (bbl/d) in November, the highest monthly level since November 1988. EIA expects U.S. crude oil production will average 7.5 million bbl/d in 2013 and 8.5 million bbl/d in 2014.
