Fuel Projection Report
The Energy Information Administration (EIA) estimates that U.S. crude oil production averaged 11.9 million barrels per day (b/d) in February, down slightly from the January average. The EIA forecasts U.S. crude oil production will average 12.3 million b/d in 2019 and 13.0 million b/d in 2020, with most of the growth coming from the Permian region of Texas and New Mexico.
Brent crude oil spot prices averaged $64 per barrel (b) in February, up $5/b from January 2019 and about $1/b lower than at the same time last year. The EIA forecasts Brent spot prices will average $63/b in 2019 and $62/b in 2020, compared with an average of $71/b in 2018. The EIA expects West Texas Intermediate (WTI) crude oil prices will average $9/b lower than Brent prices in the first half of 2019 before the discount gradually falls to $4/b in the fourth quarter of 2019 and throughout 2020.
Net imports of U.S. crude oil and petroleum products fell from an average of 3.8 million b/d in 2017 to an average of 2.3 million b/d in 2018. The EIA forecasts net imports will continue to fall to an average of 1.0 million b/d in 2019 and to an average net export level of 0.1 million b/d in 2020. In the fourth quarter of 2020, the EIA forecasts the United States will be a net exporter of crude oil and petroleum products by about 0.9 million b/d.
Natural Gas Projection
The Energy Information Administration (EIA) expects natural gas inventories will end March at 1.2 trillion cubic feet (Tcf), which would be 14% lower than levels from a year earlier and 28% lower than the five-year (2014–2018) average. The EIA forecasts natural gas storage injections will outpace the previous five-year average during the April-through-October injection season and inventories will reach 3.6 Tcf at the end of October, which would be 12% higher than October 2018 levels and 2% below the five-year average.
The Henry Hub natural gas spot price averaged $2.69/million British thermal units (MMBtu) in February, down 42 cents/MMBtu from January. The EIA expects strong growth in U.S. natural gas production to put downward pressure on prices in 2019. The EIA expects Henry Hub natural gas spot prices will average $2.85/MMBtu in 2019, down 30 cents/MMBtu from 2018. NYMEX futures and options contract values for June 2019 delivery traded during the five-day period ending March 7, 2019 suggest a range of $2.40/MMBtu to $3.51/MMBtu encompasses the market expectation for June 2019 Henry Hub natural gas prices at the 95 percent confidence level.
The EIA forecasts dry natural gas production will average 90.7 billion cubic feet per day (Bcf/d) in 2019, up 7.4 Bcf/d from 2018. The EIA expects natural gas production will continue to rise in 2020 to an average of 92.0 Bcf/d.
Access this timely fleet industry perspective, natural gas spreadsheet and fuel report spreadsheet from ARI and read more from some of our industry experts: Charlie Guthro explaining how to buy the right vehicles to gain more control over costs, and Ted Davis showing how misalignment between vehicle specifications and job responsibilities can get expensive.