U.S. Petroleum Consumption. EIA projects total U.S. consumption of liquid fuels and other petroleum products to decrease by 790,000 bbl/d (4.1 percent) in 2009 (U.S. Petroleum Products Consumption Growth Chart). This includes projected declines of 320,000 bbl/d (8.2 percent) in distillate fuel consumption and 150,000 bbl/d (9.8 percent) in jet fuel consumption. Motor gasoline consumption is projected to decline slightly in 2009 as the positive impact of the significant price decline compared with last summer offsets some of the negative impact of the economic downturn. The modest economic recovery projected for 2010 is expected to contribute to a 280,000-bbl/d (1.5 percent) increase in total liquid fuels consumption, led by increases of 110,000 bbl/d (3.2 percent) in distillate consumption, 50,000 bbl/d (0.6 percent) in motor gasoline consumption, and 60,000 bbl/d (2.6 percent) in other oils consumption.
U.S. Petroleum Supply. Total U.S. crude oil production averaged 4.95 million bbl/d in 2008, down from 5.06 million bbl/d in 2007 (U.S. Crude Oil Production Chart). U.S. production is expected to increase to an average of 5.22 million bbl/d in 2009 and 5.25 million bbl/d in 2010. Oil production from the Thunder Horse, Tahiti, Shenzi, and Atlantis Federal offshore fields is expected to account for about 14 percent of lower-48 crude oil production by the fourth quarter of 2010.
Last week the National Oceanic and Atmospheric Administration (NOAA) lowered its outlook for an above-average hurricane season from a 25-percent chance in their May outlook to a 10-percent chance in their 2009 Atlantic Hurricane Season Outlook Update. This revision, combined with no reported shut-in production during June and July, reduces EIA's original seasonal estimates of crude oil and natural gas production outages (The 2009 Outlook for Hurricane Production Outages in the Gulf of Mexico) by about one-half. However, significant uncertainty always remains as any one storm can cause widespread disruptions and damage (see EIA, This Week in Petroleum, July 29, 2009 and August 5. 2009).
U.S. Petroleum Product Prices. Regular-grade motor gasoline retail prices, which averaged $3.26 per gallon in 2008, are expected to average $2.34 per gallon this year. Higher projected crude oil prices in 2010 (about 30 cents per gallon on average), along with slightly higher refining margins, are expected to boost average motor gasoline prices to $2.66 per gallon next year. Diesel fuel retail prices, which averaged $3.80 per gallon in 2008, are projected to average $2.46 per gallon in 2009 and $2.84 in 2010.
Source: EIA – Short Term Energy Outlook