Most recent energy outlook largely on track with previous month
November 11, 2021
In mid-October, the Energy Information Administration’s short-term energy outlook indicated recovery wouldn’t occur until next year, and that remains the case following the release of the November outlook.
The Nov. 9 release reflected what the October forecast predicted in terms of higher crude oil prices due to COVID-19, an active hurricane season and steady draws on global oil inventories.
However, there was one area where the forecasted was adjusted, Timothy Hess, EIA’s product manager for short-term energy outlook, said.
“I would generally say that our report was similar to last month’s,” Hess said. “The major change I would note is that we raised our U.S. crude oil production forecast for next year. We raised our expectation of production in the Permian Basin as a result of higher expected drilling productivity, and we raised our expectation of production in the Gulf of Mexico, too.”
Heightened levels of uncertainty will linger, says the outlook, but an increase in production of 11.6 million barrels per day in December is expected.
Winter, like hurricane season did, could create additional uncertainty and that will be something the EIA continues to monitor ahead of the next short-term outlook released on Dec. 7.
Rising crude oil prices in October contributed to the highest (nominal) gasoline prices since September 2014, said the EIA outlook. In addition, inventories fell by 11.4 million barrels in October and gasoline consumption increased by 9.2 million barrels per day.
The diesel supply chain has recently seen the effects of this combination firsthand. In fact, Brad Jenkins, Pilot Co. senior VP of supply and distribution, provided some clarity to Land Line on Nov. 8 about supply issues that have limited capacity at some of their locations.
Hess said EIA is forecasting diesel prices to average $3.64 per gallon this month and $3.57 per gallon in December. Both are an increase from the previous outlook. LL