The combination of lower refinery demand and growth in U.S. crude oil production is expected to put downward pressure on the price of WTI relative to that of Brent over the STEO forecast period. In the near term, EIA expects the differential will widen from current levels to average $5 per barrel during the fourth quarter of 2013, reflecting the downward pressure on WTI prices and some upward pressure on Brent prices from planned North Sea maintenance.
EIA expects the Brent-WTI differential to reach a high during the forecast period of $7.50 per barrel in early 2014, after which time planned pipeline expansions and seasonal increases in refinery utilization in the summer months again narrow the spread. EIA expects the spread to average $6 per barrel during the fourth quarter of 2014.
Gasoline and diesel fuel prices both decrease
The U.S. average retail price of regular gasoline decreased one cent to $3.63 per gallon as of August 5, 2013, one cent lower than last year at this time and below the year-ago price for the first time since May 2013. Prices decreased in all regions except the Midwest, where the price increased one cent to $3.59 per gallon. The largest decrease came on the West Coast, where the price fell four cents to $3.89 per gallon. The Gulf Coast price is $3.45 per gallon, three cents lower than last week. On the East Coast, the price dropped two cents to $3.63 per gallon. Rounding out the regions, the Rocky Mountain price declined less than a penny to remain at $3.64 per gallon.
The national average diesel fuel price decreased one cent to $3.91 per gallon, six cents higher than last year at this time. Prices increased less than a penny on the West Coast to remain at $4.05 per gallon and two cents in the Rocky Mountains to $3.93 per gallon, while decreasing in all other regions. The East Coast and Midwest prices both decreased one cent, to $3.92 per gallon and $3.88 per gallon, respectively. The Gulf Coast price declined less than one cent to $3.84 per gallon.