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Economic Forecasts

Oil Prices Buffeted by Global Supply Concerns

Kiplinger's latest forecast on the direction of energy prices


GDP 3.0% pace in '18, up from 2.3% in '17 More »
Jobs Big job gains will continue, but reflect a strong economy More »
Interest rates 10-year T-notes at 3.3% by end '18 More »
Inflation 2.6% in '18, up from 2.1% in '17 More »
Business spending Up 7% in '18, boosted by expanded tax breaks More »
Energy Crude trading from $55 to $60 per barrel in April More »
Housing Existing-home sales up 1.6%, new-home sales up 9.8% in '18 More »
Retail sales Growing 4.7% in '18 (excluding gas) More »
Trade deficit Widening 5%-6% in '18 More »

Gasoline prices remain relatively bearable for most drivers as spring nears. The national average price of regular unleaded rose a couple of pennies from a week ago to hit $2.55 per gallon. We expect the average price to continue fluctuating between $2.50 and $2.60 per gallon in the next few weeks. Diesel, which now averages $2.93 per gallon, is down a penny from last week. Odds are it won’t move much, either way, this spring.

Oil’s price continues fluctuating daily with little long-term movement. At $62 per barrel, benchmark West Texas Intermediate crude is up $1 from a week ago but little changed from its recent trading range of about $60 to $63. Worldwide oil demand is strong, but supply keeps growing, thanks to rising output in the U.S. We think prices will slip a bit this spring, to a range of $55 to $60 per barrel, because of the ongoing production uptick.

Via E-mail: Energy Alerts from Kiplinger

Natural gas prices are trending lower again despite chilly March weather across much of the country. The benchmark gas futures contract recently traded at $2.65 per million British thermal units (MMBtu), even as the amount of gas held in storage keeps sinking. Gas stockpiles are now 32% below their levels at this time last year, and 16% below their long-term average for this time of year. Yet prices have been stuck below the $3-per-MMBtu trading level that prevailed for much of the winter. Evidently, traders are betting that the weather will warm up soon and that gas demand will fall off sharply. Assuming no late-season cold spell causes supplies to fall further, we look for gas to hover between $2.50 and $2.75 per MMBtu this spring.

Source: Department of Energy, Price Statistics