The market's perception of reduced risk to Iraqi oil exports and news regarding increasing Libyan oil exports contributed to a drop in the Brent crude oil spot price to an average of $107 per barrel (bbl) in July, $5/bbl lower than the June average. EIA projects Brent crude oil prices to average $107/bbl over the second half of 2014 and $105/bbl in 2015. West Texas Intermediate (WTI) crude oil prices fell from an average of $106/bbl in June to $104/bbl in July,despite record levels of U.S. demand for crude oil. The WTI discount to Brent, which averaged $11/bbl in 2013, is expected to average $8/bbl and $9/bbl in 2014 and 2015, respectively, both $1/bbl lower than projected in last month's STEO.
Regular gasoline retail prices fell to an average of $3.61 per gallon (gal) in July, 8 cents/gal below the June average. Regular gasoline retail prices are projected to continue to decline to an average of $3.30/gal in December. EIA expects regular gasoline retail prices to average $3.50/gal in 2014 and $3.46/gal in 2015, compared with $3.51/gal in 2013.
U.S. total crude oil production averaged an estimated 8.5 million barrels per day (bbl/d) in July, the highest monthly level of production since April 1987. U.S. total crude oil production, which averaged 7.5 million 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 3.1 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. petroleum and other liquids 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 spot prices fell from $4.47/million British thermal units (MMBtu) at the beginning of July to $3.78/MMBtu at the end of the month as natural gas stock builds continued to outpace historical norms. Natural gas working inventories on August 1 totaled 2.39 trillion cubic feet (Tcf), 0.54 Tcf (18%) below the level at the same time a year ago and 0.61 Tcf (20%) below the previous five-year average (2009-13). Projected natural gas working inventories reach 3.46 Tcf at the end of October, 0.35 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 MMBtu in 2013, will average $4.46/MMBtu in 2014 and $4.00/MMBtu in 2015, $0.31/MMBtu and $0.51/MMBtu lower than in last month's STEO, respectively.