Despite the sudden increase of gasoline at the pump prices, the news for the coming year about energy prices is mostly good.
View full sizeGasoline prices are higher now than they were in recent months, but they are probably going to remain $1 less per gallon than they were last year. WASHINGTON, D.C. -- Consumer prices of gasoline, heating oil, natural gas and propane are expected to stay relatively low this year, federal forecasters said on Tuesday -- with the caveat that there is a high degree of uncertainty about oil and gasoline pricing.
In its monthly Short Term Energy Outlook, the U.S. Energy Information Administration predicted that:
1. The national average price of gasoline this year will be $2.33 a gallon, more than a dollar less than the national average price in 2014. The prediction does not rule out higher or lower average prices in some states during some months.
"Despite the recent end to 17 straight weeks of declining gasoline prices, the average U.S. household is forecast to save $750 in gasoline costs this year compared with 2014," said Adam Sieminski, EIA administrator, in prepared comments accompanying the report.
The agency bases the good-news gasoline prediction on its expectation that global crude oil supplies will outpace demand this year, keeping oil prices here and abroad in the $50 to $60 per barrel range.
The average price of gasoline in Cleveland and Akron on Tuesday is $2.21 -- up from about $1.98 a month ago, but much less than $3.41 a year ago, according to GasBuddy.com, the Internet-based price watchdog with 14 million motorist members reporting prices.
The EIA also projects that despite declining drilling rig counts in some oil shale regions, U.S. crude production will average 9.3 million barrels a day this year and 9.5 million barrels a year in 2016 -- just short of the all-time annual average high of 9.6 million barrels a day in 1970.
2. Home heating oil and propane prices will be moderate. Heating oil prices are expected to average $2.96 this winter. Propane prices in the Midwest are expected to be 27 percent lower than year-ago prices.
3. Natural gas national wholesale prices will average about $3.05 for roughly 1,000 cubic feet, or 1 Mcf, this year, down from $4.39 per Mcf in 2014. Prices in 2016 should average $3.47 per Mcf, still much lower than 2014. Contract prices are expected to be even lower -- meaning consumer prices should remain very moderate.
The EIA noted that U.S. natural gas production hit a peak of 77.3 billion cubic feet a day in November 2014 and is expected to average 77.28 billion cubic feet a day in 2015 and 78.95 billion cubic feet a day in 2016.