By STEPHANY ROMANOW
Adam Sieminski, administrator for the US Energy Information
Administration, described a "flattening" in transportation
fuels pricing and abundant new crude oil supplies as the
contributing factors in the agencys 2014 Summer
Non-OPEC supply growth is expected to outpace global
consumption growth and stabilize oil prices, Sieminski said
in a webcast on Tuesday. North America leads in new
production supplies, stemming from shale oil in the US and
growth in the Canadian oil sands.
Developing nations are driving new demand for transportation
fuels,while OECD nations energy demand continues to
flatten and decline.
Brent crude oil prices are expected to average $105/bbl this
summer, as compared to $107/bbl in 2013. Crude oil pricing
has been level; Brent oil price is forecast to drop to
$101/bbl in 2015.
Multiple market uncertainties have the potential to impact
pricing and supplies during the rest of 2014. Crude
production outages are higher than average, with trends of
500,000 bpd. Outages peaked at 2.6 million bpd in March
Problems in producing nations of Sudan, Libya, Nigeria, Iran,
and Iraq support the higher-than normal outages.
The outlook for US gasoline market is similar to 2013
conditions, he said. Regular gasoline retail is expected to
average $3.57/gal this summer, compared to $3.58/gal in 2013.
Diesel fuel prices also expected to fall slightly from an
average of $3.89/gal last summer to $3.87/ gall in 2014.
A small increase in US transportation fuel demand is expected
as the economy continues to strengthen. Some new demand will
be offset by better fuel economy in 2014.
Siemininski commented that uncertainty is always a factor and
will influence the short-term outlook. Geopolitics adds
volatility to crude/energy markets. Supply and pipeline
disruptions will influence prices. Unplanned refinery
outages can cause price
spikes as refineries do maintenance
in preparation for the
summer drive season.
Additionally, there is inventory tightness in gasoline
supplies, especially in PADDs 1 and 2., he said.
Henry Hub spot prices are expected to average about
$4.58/thousand cf in 2014. That is a $0.74/ thousand cf
increase over the 2013 average price.