In line with its newest brief time period power outlook (STEO), which was launched on January 14 and accomplished its forecast on January 9, the U.S. Vitality Info Administration (EIA) expects the U.S. retail common gasoline worth to drop this 12 months and subsequent 12 months.
In its January STEO, the EIA projected that the retail common gasoline worth would common $3.20 per gallon in 2025 and $3.02 per gallon in 2026. The retail common gasoline worth averaged $3.31 per gallon in 2024, the EIA’s January STEO confirmed.
In line with a quarterly breakdown included within the STEO, the EIA forecast that the retail common gasoline worth would common $3.06 per gallon within the first quarter of 2025, $3.31 per gallon within the second quarter, $3.33 per gallon within the third quarter, $3.06 per gallon within the fourth quarter, $2.98 per gallon within the first quarter of 2026, $3.14 per gallon within the second quarter, $3.08 per gallon within the third quarter, and $2.85 per gallon within the fourth quarter of subsequent 12 months.
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“U.S. retail gasoline costs in our forecast are principally decrease in 2025 and 2026 than they have been in 2024, when the retail worth averaged about $3.30 per gallon,” the EIA famous in its newest STEO.
“We forecast common U.S. gasoline costs in 2025 will lower by greater than 10 cents/gallon on an annual foundation, down about three p.c from 2024. In 2026, we forecast an additional lower of just about 20 cents/gallon, or an extra six p.c,” it added.
“Retail gasoline costs decreased in each 2023 and 2024, after growing considerably in 2022. On each a nominal and share foundation, we estimate the worth decreases in 2025 and 2026 will probably be smaller than the lower between 2022 and 2023 (when costs fell 11 p.c 12 months on 12 months),” the EIA continued.
The EIA said in its January STEO that worth decreases since 2022 have mirrored each lowering crude oil costs and narrowing refinery margins.
“In 2025 and 2026, we estimate refinery margins will stay comparatively flat, however gasoline costs will proceed to lower with the worth of crude oil,” the EIA added.
The EIA famous in its newest STEO that, this 12 months, it expects decrease refinery capability will put some upward strain on gasoline costs however added that it expects this strain to be counteracted by decrease crude oil costs.
“The decrease inventories mirror a small improve in gasoline consumption in 2025, in addition to lowered refinery manufacturing,” the EIA stated within the STEO.
The EIA went on to state within the STEO that it estimates that retail gasoline costs will lower in most U.S. areas throughout 2025. It famous that the exception is within the Rocky Mountains, “the place [we] anticipate gasoline costs will probably be principally unchanged from 2024”.
“In 2026, we anticipate retail gasoline costs within the West Coast to extend, although costs proceed to lower on the East Coast, on the Gulf Coast, and within the Midwest and Rocky Mountains,” the EIA stated within the STEO.
“Larger West Coast costs mirror decreased regional gasoline manufacturing following the anticipated closure of Phillips 66’s Los Angeles refinery on the finish of 2025. Larger Rocky Mountain costs mirror expectations for rising demand and ongoing regional capability constraints,” it added.
In a launch posted on its web site in October, Phillips 66 introduced plans to stop operations at its Los Angeles-area refinery within the fourth quarter of 2025.
“With the long-term sustainability of our Los Angeles Refinery unsure and affected by market dynamics, we’re working with main land improvement companies to judge the long run use of our distinctive and strategically positioned properties close to the Port of Los Angeles,” Mark Lashier, chairman and CEO of Phillips 66, stated in that launch.
“Phillips 66 stays dedicated to serving California and can proceed to take the mandatory steps to satisfy our business and buyer calls for,” he added.
To contact the writer, e mail andreas.exarheas@rigzone.com
