The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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Fuels eIA N e w s 12 NOVEMBER 2014 | FUEL OIL NEWS | www.fueloilnews.com to natural gas and electricity expenditures that are 5% and 2% lower than last winter (see EIA Short-Term Energy Outlook and Winter Fuels Outlook slideshow). • Driven in large part by falling crude oil prices, U.S. regular gasoline retail prices fell to an average of $3.41/gallon in September, 29 cents below the June average. U.S. regular gasoline retail prices are projected to continue to decline to an average of $3.14/gal in December. EIA expects U.S. regu- lar gasoline retail prices, which averaged $3.51/gal in 2013, to average $3.45/gal in 2014 and $3.38/gal in 2015. • Weakening global demand helped North Sea Brent crude oil spot prices fall to an average of $97 per barrel in September, the first month Brent prices have averaged below $100/bbl in more than two years. EIA projects that Brent crude oil prices will average $98/bbl in fourth-quarter 2014 and $102/bbl in 2015. The WTI discount to Brent, which averaged $11/bbl in 2013, is expected to average $7/bbl in both 2014 and 2015. • Total U.S. crude oil production averaged an esti- mated 8.7 million barrels per day in September, the high- est monthly production since July 1986. Total crude oil production, which averaged 7.4 million bbl/d in 2013, is expected to average 9.5 million bbl/d in 2015. If realized, the 2015 forecast would be the highest annual average crude oil production since 1970. Natural gas plant liquids production is expected to increase from an average of 2.6 million bbl/d in 2013 to 3.2 million bbl/d in 2015. • Natural gas working inventories on September 26 totaled 3.10 trillion cubic feet, 0.37 Tcf (11%) below the level at the same time a year ago and 0.40 Tcf (11%) below the previous five-year average (2009-13). Projected natural gas working inventories reach 3.53 Tcf at the end of October, 0.28 Tcf below the level at the same time last year. Despite the lower stocks at the start of this winter's heating season, EIA expects the Henry Hub natural gas spot price to $4.00/million British thermal units this win- ter compared with $4.53/MMBtu last winter. This price forecast reflects both lower expected heating demand and significantly higher natural gas production this winter. This Week in Petroleum, Release date: Oct. 8, 2014 Autumn has arrived in the Midwest and the Mid-Atlantic states as temperatures turned noticeably colder and snow fell across Wisconsin and Minnesota. Notwithstanding triple-digit temperatures in parts of California, the winter heating season has begun for much of the country, including the Midwest and the Northeast, where heating oil and propane are important heating fuels. Each October, EIA publishes an outlook for winter energy supply, demand, and prices as part of its October Short- Term Energy and Winter Outlook. EIA projects the retail price of heating oil to average $3.63 per gallon this winter heating season (Oct. 2014–March 2015), which would be $0.25/gal lower than the average price during the winter of 2013–14 (Figure 1). This lower heating oil price reflects EIA's forecast for a lower Brent crude oil price. EIA projects the retail propane price during the winter heating season in the Midwest and Northeast to average $0.62/gal and $0.18/ gal lower, respectively, than the winter 2013–14 average. The market for heating fuels is highly dependent on winter temperatures. East of the Rocky Mountains, where propane and oil use as heating fuels is concentrated, the lat- Heating Oil and Propane expenditures Projected To Be lower Than last Winter