Prices for oil, natural gas, gasoline heading higher in 2017, says forecast

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By Cathy Proctor, Denver Business Journal |

Higher prices for crude oil, natural gas and gasoline are among the highlights from the federal Energy Information Administration’s first short-term outlook for 2017.

The new forecast projects that U.S. crude oil prices, which averaged $43 per barrel in 2016, will rise this year to an average of $52 per barrel and will add on another $3 per barrel in 2018, to an average of $55.

U.S. gasoline prices, which averaged $2.15 per gallon in 2016, are expected to increase to $2.31 per gallon in the first quarter, and average $2.38 per gallon for this year and $2.41 per gallon in 2018, the EIA said.

On the natural gas front, average prices in 2016 were $2.15 per thousand cubic feet and are expected to jump to an average of $3.55 per thousand cubic feet in 2017 and $3.73 per thousand cubic feet in 2018.

On the production side, U.S. oil production averaged 8.9 million barrels per day during 2016 and is expected to rise slightly to 9 million barrels per day in 2017 and climb to 9.3 million barrels per day in 2018, the report said.

The EIA said it expects the new oil supplies will come from the Gulf of Mexico and shale oil plays across the U.S., such as in Colorado’s Denver-Julesburg Basin.

Natural gas production is expected to drop in 2016 to an average of 72.4 billion cubic feet per day compared to 2015 when production numbers are made final. If that proves to be true, it would be the first drop in the nation’s natural gas production since 2005, the EIA said.

Production increases are expected this year and next, rising by an average of 1.4 billion cubic feet per day in 2017 and 2.8 billion cubic feet per day in 2018, the EIA said.

Also, natural gas edged out coal as the leading fuel for electricity generation during 2016, the EIA said.

The agency said it estimates natural gas provided 34 percent of the nation’s electricity in 2016 while coal provided 30 percent, “marking the first time that a fuel other than coal provided the largest share of electricity generation on an annual basis,” the report said.