WASHINGTON – The Energy Information Administration (EIA) revised its demand forecast for gasoline upward to the highest level since 2009 in its most recent update to the Short-Term Energy Outlook.
Low prices spurred the agency to increase its 2015 demand forecast for gasoline by 1.6% to 9 million barrels per day (BPD). It also revised its forecast downward for the full-year 2015 retail gas price national average from $2.60 per gallon to $2.33 per gallon.
EIA administrator Adam Sieminski said that the drop in oil prices and resulting low gas prices will save the average U.S. household around $750 versus 2014. "Gasoline prices have already fallen for 15 weeks in a row, which matches the record streak of price declines set at the end of 2008," he noted.
The agency expects retail gas prices to average $2.13 per gallon in January 2015, the lowest monthly price since April 2009, Sieminski said. It projects retail gas prices during the first quarter to average $2.16 per gallon.
According to EIA, regular gasoline prices fell to $2.14 per gallon on January 12, which is 64 cents per gallon (CPG) less than the average at the beginning of December 2014, and the lowest weekly price since May 2009. Regionally, prices ranged from $1.91 per gallon in Petroleum Administration for Defense District (PADD) 3--this includes most of the Gulf Coast states--to $2.49 per gallon in PADD 5, the West Coast states.
EIA cites dropping Brent crude prices as the main reason behind dropping gas prices. Driven by lower prices, EIA forecasts liquid fuels consumption to grow 1.4% in 2015. Despite the downward price revision for 2015, EIA projects a $2.72 per gallon average for 2016, which it expects will depress consumption.
Retail diesel prices averaged $3.83 per gallon in 2014. EIA revised its 2015 price projection downward from $3.07 to an average of $2.85 per gallon, but expects diesel prices to grow to a $3.25 per-gallon average for 2016.
Total liquid-fuels consumption in 2014 grew 0.5%, EIA reports, or an estimated 100,000 barrels per day (BPD). Gasoline consumption was up 1.1%, driven by increased highway travel. Distillate consumption rose 4.6%.
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