EIA – Short-Term Energy Outlook – April 2012

U.S. Energy Information Administration (EIA) –

Short-Term Energy Outlook

Release Date: April 10, 2012  |  Next Release Date: May 8, 2012

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Highlights

• EIA has lowered the forecast 2012 average U.S. refiner acquisition cost of crude oil by $2 per barrel from last month’s Outlook to $112 per barrel, still $10 per barrel higher than last year’s average price. EIA expects the price of West Texas Intermediate (WTI) crude oil to average about $106 per barrel in 2012, the same as in last month’s Outlook but $11 per barrel higher than the average price last year. Constraints in transporting crude oil from the U.S. midcontinent region contribute to the expected discount for WTI relative to other world crude oil prices. EIA expects WTI prices to remain relatively flat in 2013, averaging about $106 per barrel, while the average U.S. refiner acquisition cost of crude oil averages $110 per barrel.

• During the April-through-September summer driving season this year, regular gasoline retail prices are forecast to average about $3.95 per gallon, peaking in May at a monthly average price of $4.01 per gallon. EIA expects regular gasoline retail prices to average $3.81 per gallon in 2012 and $3.73 per gallon in 2013, compared with $3.53 per gallon in 2011. The June 2012 New York Harbor Reformulated Blendstock for Oxygenate Blending (RBOB) futures contract averaged $3.28 per gallon for the five trading days ending April 5. Based on the market value of futures and options contracts, there is a 40 percent probability that its price at expiration will exceed $3.35 per gallon, consistent with a monthly average regular-grade gasoline retail price exceeding $4.00 per gallon in June.

• The warmer-than-normal weather this past winter contributed to high natural gas working inventories that continue to set new record seasonal highs, with March 2012 ending at an estimated 2.48 trillion cubic feet (Tcf), about 57 percent above the same time last year. EIA’s average 2012 Henry Hub natural gas spot price forecast is $2.51 per million British thermal units (MMBtu), a decline of $1.49 per MMBtu from the 2011 average spot price. EIA expects that Henry Hub spot prices will average $3.40 per MMBtu in 2013.

• EIA expects electricity generation from coal to decline by about 10 percent in 2012 as generation from natural gas increases by about 17 percent. EIA forecasts that electricity generation from coal will increase by about 7 percent and generation from natural gas fall by 3 percent in 2013 as projected coal prices to the power sector fall slightly while natural gas prices increase, allowing coal to regain some of its power sector generation share.

>>Read the Full Short-Term Energy Outlook here.