Unrest in Iraq put upward pressure on world oil prices last month, helping North Sea Brent crude oil spot prices reach their highest daily level of the year at just over $115/barrel (bbl) on June 19. North Sea Brent crude oil spot prices increased from a monthly average of $110/bbl in May to $112/bbl in June. This was the 12th consecutive month in which the average Brent crude oil spot price ranged between $107/bbl and $112/bbl. EIA projects Brent crude oil prices to average $110/bbl in 2014 and $105/bbl in 2015, $2/bbl and $3/bbl higher than projected in last month's STEO, respectively. The West Texas Intermediate (WTI) crude oil price discount to Brent is expected to average $9/bbl and $10/bbl in 2014 and 2015, respectively.
During this year's April-through-September summer driving season, regular gasoline retail prices are forecast to average $3.66/gallon (gal), 8 cents higher than last year. Regular gasoline retail prices are projected to fall from an average of $3.68/gal during the second quarter to $3.64/gal during the third quarter as lower refinery margins more than offset higher crude oil prices. EIA expects regular gasoline retail prices to average $3.54/gal in 2014 and $3.45/gal in 2015, compared with $3.51/gal in 2013.
U.S. total crude oil production, which averaged 7.4 million barrels per day (bbl/d) in 2013, is expected to average 8.5 million bbl/d in 2014 and 9.3 million bbl/d in 2015. The 2015 forecast represents the highest annual average level of oil production since 1972. Natural gas plant liquids production increases from an average of 2.6 million bbl/d in 2013 to 3.0 million bbl/d in 2015. The growth in domestic production has contributed to a significant decline in petroleum imports. The share of total U.S. liquid fuels consumption met by net imports fell from 60% in 2005 to an average of 33% in 2013. EIA expects the net import share to decline to 22% in 2015, which would be the lowest level since 1970.
Natural gas working inventories on June 27 totaled 1.93 trillion cubic feet (Tcf), 0.67 Tcf (26%) below the level at the same time a year ago and 0.79 Tcf (29%) below the previous five-year average (2009-13). Projected natural gas working inventories reach 3.43 Tcf at the end of October, 0.38 Tcf below the level at the same time last year. EIA expects that the Henry Hub natural gas spot price, which averaged $3.73 per million British thermal units (MMBtu) in 2013, will average $4.77/MMBtu in 2014 and $4.50/MMBtu in 2015.