Fuel prices continue to fall as global oil picture starts shifting

Fuel prices continue to fall as global oil picture starts shifting

Average retail pump prices in the U.S.  for both diesel and gasoline continued to fall this week, according to data tracked by the Energy Information Administration (EIA); a decline that comes on the heels of new projections by the International Energy Agency (IEA) that the U.S. will overtake Saudi Arabia as the world’s largest oil producing nation by 2015.

According to the EIA, the average U.S. retail pump price for diesel dropped by 2.5 cents this week to $3.832 per gallon, which is down 14.8 cents per gallon compared to the same week in 2012.

All regions of the U.S. witnessed a decline in diesel prices, with all of them under the $4 per gallon mark except for California, which averaged a pump price of $4.055 per gallon this week, the agency said.

The West Coast, minus California, witnessed the biggest one-week price drop in the country of 4.2 cents per gallon, dropping the overall average for diesel in that section of the U.S. to $3.881 per gallon, EIA noted – adding that the Gulf Coast is home to the cheapest diesel at $3.752 per gallon.

Average retail pump prices in the U.S. for gasoline also fell this week, the agency reported, dropping 7.1 cents to $3.194 per gallon, which is 25.5 cents cheaper compared to the same week in 2012.

Prices declined in all regions of the nation, with the Gulf Coast slipping below the $3 per gallon mark at $2.978 per gallon, the EIA said. The biggest one-week drop in gasoline prices occurred in the Rocky Mountain area, which experienced an 8 cent drop to $3.227 per gallon.

The other big news where fuel prices are concerned comes from the latest World Energy Outlook released by the IEA this week, which projects that the U.S. will becomes the top oil producing nation in the world by 2015 – a full two years earlier than the IEA’s previous prediction.

The IEA said that by 2015, the U.S. is expected to be producing 11 billion barrels of oil a day, eventually peaking at nearly 12 million barrels a day by 2025 before oil production levels begin to gradually taper off.

Within that interim, however, the U.S. is expected to become “self-sustaining” in terms of meeting its own oil demand – a situation the IEA believes will upend the current global energy production and consumption flows.

“The center of gravity of energy demand is switching decisively to the emerging economies, particularly China, India and the Middle East, which drive global energy use one-third higher,” the IEA noted in its report.

“China is about to become the largest oil-importing country and India becomes the largest importer of coal by the early 2020s [while] the U.S. moves steadily towards meeting all of its energy needs from domestic resources by 2035,” the agency said. “Together, these changes represent a re-orientation of energy trade from the Atlantic basin to the Asia-Pacific region.”

The IEA added that demand for mobility and for petrochemicals keeps oil use on an upward trend to 2035, although the pace of growth slows. “The decline in oil use in OECD [Organization for Economic Cooperation] countries accelerates. China overtakes the U.S. as the largest oil-consuming country and Middle East oil consumption overtakes that of the European Union, both around 2030. The shifting geography of demand is further underlined by India becoming the largest single source of global oil demand growth after 2020.”

The agency pointed out that oil consumption will remain concentrated in just two sectors by 2035: transport and petrochemicals.

“Transport oil demand rises by 25% to reach 59 million barrels per day, with one-third of the increase going to fuel road freight in Asia,” it said. “In petrochemicals, the Middle East, China and North America help push up global oil use for feedstocks to 14 million barrels per day. High prices encourage efficiency improvements and undercut the position of oil wherever alternatives are readily available, with biofuels and natural gas gaining some ground as transport fuels.”

TAGS: News
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish