The U.S. Energy Information Administration (EIA) on Tuesday released its Short-Term Energy Outlook (STEO) for December. EIA is now forecasting that the average price for a barrel of Brent crude oil will be $71.40 a barrel this year and just under $61 a barrel in 2019. West Texas Intermediate (WTI) crude is expected cost about $7 a barrel less in both years. Brent crude averaged $65 a barrel on the spot market in November, down from an average of $81 a barrel in October, the largest month-over-month decline in five years.

These forecasts have all tumbled since EIA’s November report forecasting Brent at more than $73 a barrel this year and $72 next year.

Despite the drop in crude oil prices, the EIA now forecasts that the retail gas prices at the end of December will rise from an October forecast of $2.57 a gallon to $2.73. A gallon of gas averaged $2.42 in 2017.

The agency also expects gasoline prices to average $2.50 per gallon for all of next year, a decrease of 25 cents a gallon since last month’s projection.

EIA estimates of U.S. crude oil production rose from 11.4 million to 11.5 million barrels a day in November, while the agency continues to see an average of 10.9 million barrels a day for the full year, up from a daily average of 9.4 million barrels in 2017. November production was 150,000 barrels a day higher than estimated October production. For 2019, the EIA continues to project U.S. production at an average of 12.1 million barrels a day.

U.S. natural gas production averaged is expected to average 86.9 billion cubic feet per day in 2018, unchanged from October’s estimate. For the full year, EIA forecasts dry gas production at an average daily rate of 83.3 billion cubic feet, up by 100 million cubic feet compared with last month’s projections. For 2019, the agency now sees average daily production rising to 97.09 billion cubic feet.

Non-OPEC liquids production is forecast to rise year over year in 2018 by about 2.46 million barrels a day to 61.2 million barrels a day. Total world production is forecast at 100.42 million barrels a day, up from 98.05 million barrels a day in 2017. Annual global consumption is forecast at 100.09 million barrels a day in 2019.

The STEO also notes that natural gas prices are expected to average $3.17 per million BTUs in 2018 and $3.11 in 2019.

WTI crude oil for January delivery opened flat Tuesday at $51.02 a barrel and recently traded up about 1.4% at $51.71. The February 2019 futures contract traded at $51.87 a barrel and March futures traded at $52.05.

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