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10 JANUARY 2017 | FUEL OIL NEWS | www.fueloilnews.com FUELS EIA NE WS 3. To recognize that this Agreement should be without preju- dice to future agreements; 4. To establish a Ministerial Monitoring Committee composed of Algeria, Kuwait, Venezuela, and two participating non-OPEC countries, chaired by Kuwait and assisted by the OPEC Secretariat, to closely monitor the implementation of and compliance with this Agreement and report to the Conference; 5. This agreement has been reached following extensive consul- tations and understanding reached with key non-OPEC countries, including the Russian Federation that they contribute by a reduc- tion of 600 tb/d production. ¦ SHORT-TERM ENERGY OUTLOOK FORECAST HIGHLIGHTS Global liquid fuels U.S. crude oil production averaged 9.4 million barrels per day (b/d) in 2015, and it is forecast to average 8.8 million b/d in 2016 and 8.7 million b/d in 2017. Forecast production in 2017 is more than 0.1 million b/d higher than in last month's STEO. EIA expects Brent crude oil prices will average close to $48/ barrel (b) in the fourth quarter of 2016 and in the first quarter of 2017. Forecast Brent prices average $43/b in 2016 and $51/b in 2017. West Texas Intermediate (WTI) crude oil prices are forecast to aver- age about $1/b less than Brent prices in 2017. The values of futures and options contracts indicate significant uncertainty in the price outlook, with NYMEX contract values for February 2017 delivery traded during the five-day period ending November 3 suggesting that a range from $35/b to $66/b encompasses the market expecta- tion of WTI prices in February 2017 at the 95% confidence level. Higher crude oil prices contributed to U.S. average retail regular gasoline prices in October increasing by 3 cents/gallon (gal) from September to an average of $2.25/gal. With the switch to less-expensive winter gasoline blends and the typical seasonal decline in gasoline consumption, EIA expects gasoline prices to fall to an average of $1.97/gal in January. Retail gasoline prices are forecast to average $2.13/gal in 2016 and $2.27/gal in 2017. Global oil inventory builds are forecast to average 0.8 million b/d in 2016 and 0.5 million b/d in 2017. Natural gas Natural gas marketed production is forecast to average 77.3 bil- lion cubic feet per day (Bcf/d) in 2016, a 1.4 Bcf/d decline from the 2015 level, which would be the first annual decline since 2005. EIA expects production to start rising in November as a result of increases in drilling activity and infrastructure build-out that connects natural gas production to demand centers. In 2017, forecast natural gas pro- duction increases by an average of 2.9 Bcf/d from the 2016 level. Growing domestic natural gas consumption, along with higher pipeline exports to Mexico and liquefied natural gas exports, contribute to the Henry Hub natural gas spot price ris- ing from an average of $2.50/million British thermal units (MMBtu) in 2016 to $3.12/MMBtu in 2017. NYMEX contract values for February 2017 delivery traded during the five-day period ending November 3 suggest that a price range from $2.01/ MMBtu to $4.84/MMBtu encompasses the market expectation of Henry Hub natural gas prices in February 2017 at the 95% confidence level. Source: Short-Term Energy Outlook, published Nov. 8, 2016 by the U.S. Energy Information Administration ¦ EPA FINALIZES INCREASE IN RENEWABLE FUEL VOLUMES The EPA finalized increases in renewable fuel volume require- ments across all categories of biofuels under the Renewable Fuel Standard program. In a required annual rulemaking, the action finalizes the volume requirements and associated percentage stan- dards for cellulosic biofuel, advanced biofuel, and total renewable fuel for 2017, and for biomass-based diesel for 2018. "Renewable fuel volumes continue to increase across the board Diesel fuel retail price incl taxes, U.S. average dollars per gallon 4.00 2.00 0.00 Source: Short-Term Energy Outlook Jan 2015 Jul 2015 Jan 2016 Jul 2016 Jan 2017 Jul 2017 projections Heating oil retail price incl taxes, U.S. average dollars per gallon 4.00 2.00 0.00 Source: Short-Term Energy Outlook projections Jan 2015 Jul 2015 Jan 2016 Jul 2016 Jan 2017 Jul 2017 2014 2015 2016 2017 2018 33 123 230 311 n/a 1.63 1.73 1.9 2.0 2.0 2.67 2.88 3.61 4.28 n/a 16.28 16.93 18.11 19.28 n/a Cellulosic biofuel (millions gallons) Biomass-based diesel (billion gallons) Advanced biofuel (billions gallons) Renewable fuel (billions gallons) RENEWABLE FUEL VOLUME REQUIREMENTS FOR 2014-2018