The U.S. Energy Information Administration (EIA) says that, during the April-through-September summer driving season this year, regular gasoline retail prices are forecast to average about $3.95/gal., peaking in May at a monthly average price of $4.01/gal. EIA expects regular gasoline retail prices to average $3.81/gal. in 2012 and $3.73/gal. in 2013, compared with $3.53/gal. in 2011. The June 2012 New York Harbor Reformulated Blendstock for Oxygenate Blending (RBOB) futures contract averaged $3.28/gal. for the five trading days ending April 5. Based on the market value of futures and options contracts, there is a 40% probability that its price at expiration will exceed $3.35/gal., consistent with a monthly average regular-grade gasoline retail price exceeding $4.00/gal. in June.
EIA has lowered the forecast 2012 average U.S. refiner acquisition cost of crude oil by $2/barrel from last month’s Outlook to $112/barrel, still $10/barrel higher than last year’s average price. EIA expects the price of West Texas Intermediate (WTI) crude oil to average about $106/barrel in 2012, the same as in last month’s Outlook but $11/barrel higher than the average price last year. Constraints in transporting crude oil from the U.S. midcontinent region contribute to the expected discount for WTI relative to other world crude oil prices. EIA expects WTI prices to remain relatively flat in 2013, averaging about $106/barrel, while the average U.S. refiner acquisition cost of crude oil averages $110/barrel.
The warmer-than-normal weather this past winter contributed to high natural gas working inventories that continue to set new record seasonal highs, with March 2012 ending at an estimated 2.48 trillion cubic feet (Tcf), about 57% above the same time last year. EIA’s average 2012 Henry Hub natural gas spot price forecast is $2.51/million British thermal units (MMBtu), a decline of $1.49/MMBtu from the 2011 average spot price. EIA expects that Henry Hub spot prices will average $3.40/MMBtu in 2013.
EIA expects electricity generation from coal to decline by about 10% in 2012 as generation from natural gas increases by about 17%. EIA forecasts that electricity generation from coal will increase by about 7% and generation from natural gas fall by 33% in 2013 as projected coal prices to the power sector fall slightly while natural gas prices increase, allowing coal to regain some of its power sector generation share.