WASHINGTON -- Summer 2017 will see higher gasoline prices and consumption with tighter wholesale margins, according to a recent government forecast.
Highlights of the Energy Information Administration’s (EIA) Short-Term Energy and Summer Fuels Outlook include:
- Gasoline prices will average $2.46 per gallon for summer 2017, which includes April through September. This would be a 23-cent-per-gallon (CPG) increase from summer 2016. The government cites higher crude prices, which it expects to average $8 per barrel higher than in summer 2016. However, the summer 2017 average would still be 68 CPG lower than the previous five summers' $3.15-per-gallon average.
- Monthly averages for summer 2017 will rise from $2.39 per gallon in April to $2.51 gallon in July, and then settle to $2.43 per gallon by September.
- These averages may vary greatly by region. For example, in the West Coast states of PADD 5, the EIA is projecting a $2.87-per-gallon average for the summer. But PADD 3, the Gulf Coast states, will have the lowest average, at $2.21 per gallon.
- EIA is projecting Brent crude prices to average $54 per barrel ($1.29 per gallon) in summer 2017, up from 2016’s average of $46 per barrel ($1.09 per gallon).
- Wholesale gasoline margins should average 43 CPG for the summer, the EIA expects. While this is 2 CPG lower than summer 2016’s margin average, it is on par with the previous five summers’ averages. The government cited slowing growth in gasoline demand for the lower margins.
- Gasoline consumption should average 9.5 million barrels per day (bpd) for summer 2017, according to the EIA, which would be 0.3% higher than summer 2016’s record high. It expects highway travel to rise 1.4% from summer 2016. However, a 1.2% increase in fuel efficiency for the U.S. vehicle fleet in 2017 will likely offset this growth.
- EIA projects a $2.39-per-gallon average for all of 2017, which would boost household spending on transportation expenses by about $200 from the year prior. That said, spending is still expected to be about $300 less in 2017 vs. the annual expenditure averages from 2012 to 2016.
- Retail diesel prices should average $2.70 per gallon for summer 2017. This would be 36 CPG higher than in summer 2016 but still less than the five-year average of $3.36 per gallon. The EIA expects wholesale diesel margins to average 42 CPG, or 8 CPG higher than summer 2016.
- Refinery output should be about 20,000 bpd lower than in summer 2016, according to the EIA. It expects ethanol blending to rise nearly 20,000 bpd to hit 960,000 bpd, which would be 10.1% of total gasoline consumption.