Energy Prices Forecast

Economic Forecasts

Drivers to Benefit From Falling Gasoline Prices

Kiplinger's latest forecast on the direction of energy prices

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GDP 2019 growth will be 2.3%; 1.8% in 2020 More »
Jobs Job gains of about 170,000 per month in ’19 More »
Interest rates 10-year T-notes staying around 2% until trade war ends More »
Inflation 2.1% in ’19, up from 1.9% in ’18 More »
Business spending Up just 2% in ’19 amid uncertainty of trade war More »
Energy Crude trading from $50 to $55 per barrel in December More »
Housing 5.35 million existing-home sales, down 1.1% in ’19 More »
Retail sales Growing 4.3% in ’19 (excluding gas and autos) More »
Trade deficit Widening 7%-8% in ’19 More »

There’s more relief in sight at the gas station. The national average price of regular unleaded slipped by a penny from a week ago to reach $2.65 per gallon. Further declines are likely because of a recent sell-off in crude oil, plus lower demand for motor fuel now that the summer travel season is over. We expect the national average price of regular to approach $2.50 per gallon as autumn progresses. Diesel, which now averages $3, is also down a penny from last week and should move slightly lower in coming weeks.

Oil prices have given up all of the gains they logged after missile and drone attacks on production and refinery facilities in Saudi Arabia a few weeks ago. After spiking to more than $60 per barrel, benchmark West Texas Intermediate crude oil recently traded near $52. We look for WTI to trade from $50 to $55 for most of the remainder of the year. Given signs of slowing economic growth around the world, demand for crude is unlikely to grow much. And stockpiles of oil and refined products are ample.

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Natural gas prices remain depressed, too, with the benchmark gas futures contract recently selling for $2.27 per million British thermal units. This may seem odd, given that chilly weather is starting to spread across the United States and heating demand is on the rise. But the explanation is simple: Stockpiles of gas in underground storage are high for this time of year, so it would take a particularly severe winter to tighten the market and push prices up much. We look for gas to continue trading for well under $3 per MMBtu, unless a prolonged and wide-reaching cold spell takes hold later this season.

Source: Department of Energy, Price Statistics