In the US Energy Information Administration’s (EIA) April ‘Short-Term Energy Outlook’ (STEO), it expects vaccinations and fiscal stimulus to support continuing economic recovery and drive demand growth for petroleum products in the US.
The EIA also expects gasoline and distillate fuel consumption to increase from last summer (April through September) but remain less than in 2019.
As some of the economic and behavioural effects of COVID-19 subside over the next year, the EIA forecasts that US demand for transportation fuels will increase. It forecasts that gasoline consumption in 2021 will peak in August at 9.1 million bpd, more than the 8.5 million bpd seen in August 2020 but less than the 9.8 million bpd in August 2019. It forecasts that gasoline consumption during the summer of 2021 will average 8.8 million bpd, a 1 million bpd (13%) increase from summer 2020 but a 0.7 million bpd (7%) decrease from 2019.
The EIA forecasts the retail price of regular-grade gasoline in the US will average US$2.78/gal. during summer 2021, which is more than last summer’s average of US$2.06/gal. The EIA’s forecast of significantly more global economic activity this summer compared with last summer contributes to higher crude oil prices, which are the largest determining factor in US gasoline prices.
The response to the COVID-19 pandemic has not affected US diesel fuel demand as much as it has affected gasoline demand. The EIA forecasts that consumption of distillate fuel, which includes diesel fuel and heating oil, will average 4 million bpd this summer, an 11% increase (400 000 bpd) from last summer when distillate consumption levels reached their lowest point for the summer in the US since 2009. However, we expect distillate consumption to be nearly equal to 2019 levels (down less than 1%).
Retail prices for diesel fuel are forecast to average US$2.96/gal. this summer, which is up from an average of US$2.43/gal. last summer. However, this forecast is subject to many of the same uncertainties as our gasoline price forecast, particularly uncertainties related to crude oil prices.
The ‘Summer Fuels Outlook’ provides more detail on EIA’s gasoline and diesel fuel summer forecasts.
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