We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » Government lowers oil price outlook for 2015, 2016, sending prices tumbling
newsworthy

Government lowers oil price outlook for 2015, 2016, sending prices tumbling

August 19, 2015
Mark B. Solomon
No Comments

The federal government today lowered its forecast of average crude oil prices for 2015 and 2016, sending oil futures prices sharply lower and reducing truckers' costs even further than was projected as recently as last month.

The Department of Energy's Energy Information Administration (EIA) forecast that prices for West Texas Intermediate (WTI) crude would average $49 a barrel for 2015 and $54 a barrel in 2016, declines of $6 and $8 a barrel, respectively, over its most recent forecast in July. The agency issues a short-term energy outlook each month. The average fuel surcharge (FSC) for the spot market is just under 30 cents per mile right now. Last year, when when diesel was around $3.90, the FSC was just above 50 cents.

Prices for North Sea Brené crude, which are traded in London, have traded about $5 a barrel higher than WTI for most of 2015, EIA said. The spread is expected to persist at least through next year, the agency predicted. Retail gasoline and diesel prices tend to follow Brené prices. Labor and fuel costs are a trucker's two largest expenses. The U.S. trucking industry consumes a little more than 30 billion gallons of diesel per year, according to estimates from consultancy FTR.

The EIA's updated forecast had a negative impact on today's energy prices. As of midafternoon, WTI was quoted at $40.60 a barrel, down more than $2 a barrel from yesterday's close. Brené crude closed at $46.98 a barrel, down about $2 a barrel from yesterday's close.

Concerns over the pace of economic growth in emerging markets, continuing supply growth, increases in global liquids inventories, and the possibility of increasing volumes of Iranian crude oil entering the market contributed to the changed forecast, EIA said in a statement on its web site. It added that the pace of supply increases has slowed recently.

According to EIA's weekly forecast of pump prices, the average price of a gallon of on-highway diesel was quoted at $2.615 cents as of Monday. That's down $1.22 a gallon from the same period a year ago, according to agency data. Prices along the Gulf Coast were the lowest among the 10 areas of the country surveyed, coming in at $2.47 a gallon, a year-over-year drop of more than $1.26 a gallon. The highest prices were in California at $2.945 a gallon, a year-over-year drop of $1.14 a gallon.

The decline in diesel prices has lagged the drop in retail gasoline prices for a good portion of 2015.

Sean Hill, an economist at EIA, predicted that, by year's end, average nationwide diesel prices will drop to levels $1 a gallon below the fourth-quarter 2014 national average of $3.30 a gallon. Hill said domestic and international inventories of diesel would remain ample as refiners ramp up production to capture all the crude oil supplies on the market and to satisfy continued strong demand for gasoline. The expansion of diesel inventories is a departure from recent years, when diesel was in high demand and the market was considerably tighter, Hill said.

Hill said in an e-mail that the diesel market is heading into its seasonal winter peak, when the product is used for transportation and heating oil, "with a combination of very plentiful diesel supplies as well as pretty weak crude oil prices."

EIA divides East Coast prices into three sub-regions: New England, the Central Atlantic, and the Lower Atlantic. It also calculates prices for diesel purchased along the West Coast besides California, and includes a separate category just for costs in California.

Transportation
KEYWORDS FTR
  • Related Articles

    Goldman cuts 2015 projections for U.S., world oil prices; domestic prices could hit $70 a barrel in spring

    Diesel prices fall to less than $2.01 a gallon, lowest price in 10 years, government data show

    Truckers' 2015 fuel tab to fall by $42 billion as oil prices continue sharp decline, group forecasts

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Relaxed regulations for drone parcel delivery to take effect in March

  • Gartner survey signals increased investment in resilience over the next two years

  • Increasing Urgency for Vaccine Supplies Drives Launch of New Vaccine Manufacturing Resources on Thomasnet.com

  • What Level of Automation is Right for Your Warehouse?

  • IBM survey says digitalization trends will sweep trucking industry by 2030

Now Playing on DCV-TV

Ef7899d1 1c83 487b 9291 8af692931c96

myQ Dock Management

DCV-TV 4: Viewer Contributed
Introducing myQ Dock Management. Connect your loading dock equipment and iDock Controls from Poweramp, McGuire, or DLM to the cloud and view your loading activity online with myQ Dock Management.Facilities with myQ can monitor the real-time status of their docks and be proactive in improving efficiency and safety. ...

FEATURED WHITE PAPERS

  • Time to rethink your lift truck power

  • Warehouse Management System Project Toolkit

  • Solving Talent Management Challenges Now and In the Future

  • Shaping Up Last Mile Delivery to Surpass Customer Expectations

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing