Gasoline will cost an average of $2.60 per gallon across the United States next year as oil prices slide, but those prices also could restrain growth in domestic oil production, according to the Energy Department’s statistics arm.
That’s a nearly 23 percent decrease in pump prices that stems from plummeting crude oil prices, according to Energy Information Administration projections. The EIA forecast indicated low oil prices will stick around for some time.
Oil has fallen from more than $110 per barrel in June to around $66 per barrel to open trading just above a five-year low Tuesday. The price drop is attributed to surging U.S. production from shale energy regions in North Dakota and Texas, along with the Organization of Petroleum Exporting Countries’ decision in late November to keep production churning.
While more mature U.S. shale regions might be able to withstand current oil prices, more marginal wells with higher costs might shutter production. The EIA reflected a potential slowdown in U.S. oil growth, as it shaved 200,000 barrels per day of production off its 2015 forecast, as it now expects output to hit 9.3 million barrels per day.
Analysts have varied on when they expect a resurgence in oil prices, though most don’t expect suppressed prices to last a whole calendar year.
The EIA said Brent crude, an international index, will yield $68.08 per barrel in 2015 while West Texas Intermediate, a U.S. benchmark, will fetch $62.75 per barrel. Those figures represent a 31.6 percent and 33.1 percent drop, respectively, compared with this year.
