U.S. Energy Information Administration | Short-Term Energy Outlook January 2015 1
January 2015
Short-Term Energy Outlook (STEO)
Highlights
ï‚· This edition of the Shortâ€Term Energy Outlook is the first to include forecasts for 2016.
ï‚· 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.
ï‚· 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 (Market Prices and Uncertainty Report). 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/bbl and $112/bbl for prices in
December 2015.
ï‚· 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.
ï‚· 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 gaso