EIA's Short-Term Outlook -- July 11, 2017 -- Oil, Very, Very Bearish

EIA's short-term outlook:

Oil Markets:

• A lower forecast for crude oil prices is expected to shave a little off projected growth in U.S. oil production next year compared with the previous forecast, but annual output is still on track to reach a record high in 2018.
• A revised oil price forecast that is $2 to $4 per barrel lower for late 2017 and during 2018 than the prior forecast will make it less profitable for some U.S. producers to drill for oil.
• The United States will account for almost 90% of the increase in global production of crude oil and other liquid fuels by non-OPEC countries in 2018.

Gasoline/Refined Products:

• The price U.S. consumers are expected to pay for gasoline this summer has been revised down as lower crude oil costs provide a break at the pump.
• The price of crude oil, which accounts for about half the retail price of gasoline, has declined in recent months on rising U.S. crude oil production and high petroleum inventories.

Natural Gas:

• U.S. natural gas production is expected increase through the rest of this year and during 2018 in response to higher natural gas prices and growing liquefied natural gas exports.
• The United States will become a net exporter of natural gas this year, and U.S. liquefied natural gas exports in 2018 are expected are expected to increase 45% from this year’s levels.
• U.S. natural gas inventories at the start of the upcoming heating season this November are expected to be lower than last year, but still 2% above the five-year average.

Electricity:

• Forecast milder temperatures for this summer compared with last summer will reduce the need for air conditioning, resulting in the average U.S. household consuming 5% less electricity from June through August.

Coal:

• Higher coal-fired generation and more exports are expected to be major contributors to an increase in U.S. coal production this year, with coal output in western states rising the most.