Fuel Projection Report – April 2021

At A Glance

For the 2021 summer driving season (April–September), the EIA forecasts U.S. regular gasoline retail prices will average $2.78 USD per gallon (gal), up from an average of $2.07/gal last summer (Summer Fuels Outlook).

For all of 2021, we expect U.S. retail prices of regular-grade gasoline to average $2.66/gal.

The EIA forecasts that U.S. gasoline consumption in 2021 will average 8.6 million barrels per day (b/d), which is up from consumption in 2020 of 8.0 million b/d.

Refer to the detailed Crude Oil Report below for more details.

Do you want to estimate what fuel will cost your fleet next month? Try our fuel cost estimator.

In March, the Henry Hub natural gas spot price averaged $2.62 per million British thermal units (MMBtu), which is down from the February average of $5.35/MMBtu.

The EIA expects Henry Hub spot prices will average $2.73/MMBtu in the second quarter of 2021 and will average $3.04/MMBtu for all of 2021.

The EIA estimates that natural gas inventories ended March 2021 at nearly 1.8 Tcf. We forecast that natural gas inventories will end the 2021 injection season (end of October) at more than 3.7 Tcf.

Refer to the detailed Natural Gas Report below for more details.

 

Crude Oil Report

The April Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve. Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply during the past year and will continue to affect these patterns in the future. U.S. gross domestic product (GDP) declined by 3.5 percent in 2020 from 2019 levels. This STEO assumes U.S. GDP will grow by 5.6 percent in 2021 and by 4.2 percent in 2022. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit.

For the 2021 summer driving season (April–September), the U.S. Energy Information Administration (EIA) forecasts U.S. regular gasoline retail prices will average $2.78 per gallon (gal), up from an average of $2.07/gal last summer (Summer Fuels Outlook). Higher forecast gasoline prices reflect higher forecast crude oil prices, higher wholesale gasoline refining margins, and higher U.S. consumption of motor gasoline.

For all of 2021, we expect U.S. retail prices of regular-grade gasoline to average $2.66/gal and retail prices for all grades to average $2.78/gal, which would result in the average U.S. household spending about $480 (31 percent) more on motor fuel in 2021 compared with 2020.

The EIA expects U.S. gasoline consumption to rise in response to growing levels of GDP and employment. In addition, as COVID-19 vaccines are more widely distributed, we expect that driving will increase, causing gasoline consumption to rise. We forecast that U.S. gasoline consumption in 2021 will average 8.6 million barrels per day (b/d), which is up from consumption in 2020 of 8.0 million b/d but down from consumption in 2019 of 9.3 million b/d.

We hope this forecast summary has been helpful. You can download this month’s full Fuel Projection Report in the following formats:

Do you want to estimate what fuel will cost your fleet next month? Try our fuel cost estimator.

Natural Gas Report

In March, the U.S. benchmark Henry Hub natural gas spot price averaged $2.62 per million British thermal units (MMBtu), which is down from the February average of $5.35/MMBtu. The Henry Hub price declined primarily because the cold weather and related high demand and market disruptions that drove prices to recent highs in February abated in March.

The EIA expects Henry Hub spot prices will average $2.73/MMBtu in the second quarter of 2021 and will average $3.04/MMBtu for all of 2021, which is up from the 2020 average of $2.03/MMBtu.

We expect that continued growth in liquefied natural gas (LNG) exports, with only a slight corresponding increase in dry natural gas production, will contribute to the average Henry Hub spot price rising to $3.11/MMBtu in 2022.

The EIA estimates that natural gas inventories ended March 2021 at nearly 1.8 Tcf, which is 2 percent lower than the five-year (2016–20) average. The winter of 2020–21 had more natural gas withdrawn from storage than the five-year average, largely as a result of the cold February temperatures that occurred amid low natural gas production.

We expect that rising natural gas production and lower natural gas consumption for power generation than in the past two summers will contribute to storage injections outpacing the five-year average in 2021. We forecast that natural gas inventories will end the 2021 injection season (end of October) at more than 3.7 Tcf, which is equal to the five-year average.

We hope this forecast summary has been helpful. You can download this month’s full Natural Gas Report in the following formats: