Lower crude oil prices globally contributed to U.S. average retail regular gasoline prices averaging $2.18 per gallon in November. However, the U.S. Energy Information Administration (EIA) now forecasts Brent crude oil prices to average $43 per barrel in 2016 and $52 per barrel in 2017.
For small businesses who must run company cars, delivery vehicles, heat offices, run generators and so on, EIA’s short term energy outlook can be considered a heads up to brace themselves for higher energy costs in 2017.
Short-Term Energy Outlook Details
Effects of Rising Crude Oil Prices
A key outcome of the projected rise in crude oil prices is that gasoline prices could fall to an average of $2.10 per gallon in January, according to an EIA Short-Term Energy Outlook report released earlier this month. But, retail gasoline prices are forecast to average $2.14 per gallon in 2016 and $2.30 per gallon in 2017.
When it comes to natural gas, prices are also set to rise in the coming year.
Natural Gas Prices Set to Rise in 2017
“Growing domestic natural gas consumption, along with higher pipeline exports to Mexico and liquefied natural gas exports, contribute to the Henry Hub natural gas spot price rising from an average of $2.49 per million British thermal units (MMBtu) in 2016 to $3.27/MMBtu in 2017,” wrote EIA in its Short-Term Energy Outlook report.
EIA, nevertheless, expects the average share of U.S. total utility-scale electricity generation from utility-scale plants to grow by 0.2 percent in 2016 and by 0.7 percent in 2017. In 2015, electricity generation from utility-scale plants averaged 11,172 gigawatthours per day, EIA said.
That’s something to think about every time you urn up the thermostat in your office.
Gas Pump Photo via Shutterstock
And Saudi Arabia finally got OPEC to band together and reduce production on their end.