U.S. Liquid Fuels Consumption. U.S. liquid fuels consumption is beginning to show signs of recovery after having fallen by an average 810,000 bbl/d in 2009, the fourth consecutive annual decline (U.S. Liquid Fuels Consumption Growth Chart). Total liquid fuels consumption fell by an average 20,000 bbl/d in the first quarter compared with the same period last year. Projected total consumption for the current quarter, however, rises 490,000 bbl/d per day compared with the same period last year, with motor gasoline consumption increasing 70,000 bbl/d and distillate consumption up 220,000 bbl/d. Projected total liquid fuels consumption grows by an average 230,000 bbl/d in 2010 and 200,000 bbl/d in 2011 as all of the major petroleum products register consumption growth.

U.S. Liquid Fuels Supply and Imports. Projected domestic crude oil production increases by about 70,000 bbl/d in 2010 (U.S. Crude Oil Production Chart), which is 110,000 bbl/d less than in last month's Outlook, primarily because of the new NOAA forecast of a more active hurricane season this year. EIA estimates a median outcome of 17 million barrels of total shut-in crude oil production because of tropical storm activity in the Gulf of Mexico this year (see 2010 Outlook for Hurricane-Related Production Outages in the Gulf of Mexico).

Forecast crude oil production in 2011 falls by 20,000 bbl/d to 5.38 million bbl/d, which is also about 110,000 bbl/d less than in the previous Outlook. The lower production forecast includes EIA's preliminary estimates of the total cumulative reductions in the output of crude oil from the deepwater Gulf of Mexico of 2.4 million barrels in 2010 and 25 million barrels in 2011 because of the recently-imposed 6-month drilling moratorium. The reductions in crude oil production increase from a monthly average of about 9,000 bbl/d in September 2010 to 80,000 bbl/d by December 2011.

Projected ethanol production, which averaged 700,000 bbl/d in 2009, increases to an average of 860,000 bbl/d in 2010 and 890,000 bbl/d in 2011. EIA forecasts that liquid fuel net imports (including both crude oil and refined products), which declined by 1.4 million bbl/d in 2009, will fall by a further 110,000 bbl/d in 2010. In 2011, projected total liquid fuel net imports increase by 90,000 bbl/d.

U.S. Petroleum Product Prices. Projected regular-grade gasoline retail prices average $2.76 per gallon in 2010 and $2.92 per gallon in 2011. These projections are 10 and 6 cents per gallon, respectively, lower than those in the previous Outlook as a result of lower crude oil price projections. Forecast regular-grade pump prices average $2.79 per gallon this summer, up by 35 cents from the previous summer.

On-highway diesel fuel retail prices, which averaged $2.46 per gallon in 2009, average $2.96 per gallon in 2010 and $3.11 in 2011 in this forecast.

Source: U.S. Energy Information Administration