Higher crude oil prices, refinery outages, a pipeline disruption, and concerns over Hurricane Isaac's impact on the Gulf Coast, the United States' major refining region, contributed to higher gasoline prices during August, the Energy Information Administration (EIA) reports in the Sept. 11 Short-Term Energy Outlook.
EIA has increased the average regular-gasoline retail price forecast for the third quarter of 2012 to $3.66 per gallon from $3.49 per gallon in last month's Outlook. EIA expects retail gasoline prices to begin declining later this month as the gasoline market recovers and converts from summer-grade to winter-grade gasoline specifications. Forecast regular gasoline retail prices average $3.58 per gallon over the fourth quarter of 2012 and $3.43 per gallon in 2013.
Brent crude oil spot prices have increased at a relatively steady pace from their 2012 low of $89 per barrel on June 25 to their recent high of $117 per barrel on August 23 because of the seasonal tightening of oil markets and continuing unexpected production outages. EIA expects Brent crude oil prices to fall from recent highs over the rest of 2012, averaging $111 per barrel over the last 4 months of 2012 and $103 per barrel in 2013. West Texas Intermediate (WTI) crude oil spot prices rose by a more modest $17 per barrel between June 25 and August 23, as the WTI discount to Brent crude oil widened from $10 per barrel to $22 per barrel. EIA expects WTI spot prices to average $93 per barrel in 2013, with the WTI discount to Brent narrowing to $9 per barrel by the end of the 2013.
EIA expects U.S. total crude oil production to average 6.3 million barrels per day (bbl/d) in 2012, an increase of 0.7 million bbl/d from last year. Projected U.S. domestic crude oil production increases to 6.8 million bbl/d in 2013, the highest level of production since 1993.