EIA administrator expects flat summer market for US transportation fuels
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 Fuels Outlook.
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
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 2013.
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
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