Fuel Prices in the US Are Expected to Spike This Year

chart depicting oil price increases
Image Source: Chris Potter, CC BY 2.0

Fuel prices in the US, especially for gasoline and natural gas, are expected to go up this 2017, according to the first short-term outlook by the Energy Information Administration (EIA).

The new forecast indicates that crude oil prices in the country, which averaged $43 per barrel in 2016, will increase this 2017 to an average of $52 per barrel. It also predicts that another $3 per barrel will be added next year to an average of $55. In its report, the EIA stated:

“U.S. gasoline prices, which averaged $2.15 per gallon in 2016, are expected to increase to $2.31 per gallon in the first quarter, and average $2.38 per gallon for this year and $2.41 per gallon in 2018.

“On the natural gas front, average prices in 2016 were $2.15 per thousand cubic feet and are expected to jump to an average of $3.55 per thousand cubic feet in 2017 and $3.73 per thousand cubic feet in 2018.”

With regards to production, oil volume is said to slightly increase from 8.9 million barrels per day in 2016 to 9 million barrels per day in 2017. The EIA also predicts it to rise to 9.3 million barrels per day next year. New oil supplies are expected to be coming from the Gulf of Mexico and shale oil playing across the country, such as in the Denver-Julesburg Basin in Colorado.

As for natural gas, volume is predicted to also increase this year and in 2018, rising by an average of 1.4 billion and 2.8 billion cubic feet per day, respectively. According to the EIA report, this energy resource outmatched coal as the leading fuel for electricity generation in 2016, providing 34% of the country’s electricity during that year.