|GDP||1.8% growth for the year, down from 2.4% in '15 More »|
|Jobs||Hiring slowing to 150,000/month by end '16 More »|
|Interest rates||10-year T-notes at 1.4% by end '16 More »|
|Inflation||1.8% for '16, up from 2.4% in '17 More »|
|Business spending||4% gain in '16, after drop in '15 More »|
|Energy||Crude oil trading from $40 to $45 per barrel in Sept. More »|
|Housing||Prices up 5% on average in major metro areas More »|
|Retail sales||4% growth in '16, compared with 4.8% in '15 (excluding gas) More »|
|Trade deficit||Widening 4% in '16, after a 6.2% increase in '15 More »|
It seems increasingly clear that the spring rally in oil prices has given way to the summer doldrums. Benchmark West Texas Intermediate crude oil has hovered near $45 per barrel since Britain’s vote to depart the European Union set off shock waves in financial markets last month. Brexit probably isn’t a major factor for oil prices specifically, but it seemed to give oil traders who had been bullish a reason to think twice about wagers on further price gains.
See Also: All Our Economic Outlooks
The fundamentals of the oil market don’t support a big price increase anytime soon. Both in the U.S. and around the world, stockpiles of crude and refined fuels are bulging. And even though U.S. oil production is slipping, the outlook for demand growth is looking shaky, too. You can never rule out some sort of geopolitical crisis somewhere in the Middle East or Africa that could interfere with oil shipments and cause a sudden price spike. But barring that, we look for WTI to remain in the mid-$40s for now.
Motorists who have been enjoying the recent decline in gas prices can look forward to more of the same. The national average price of regular unleaded gasoline has slipped to $2.19 per gallon, down 3 cents from a week ago. Look for the national average to head toward $2.10 per gallon in coming weeks. Diesel, now averaging $2.34 per gallon, should dip to $2.30 by sometime in August.
The weather should be giving natural gas prices a boost. But lately, that hasn’t been the case. At $2.69 per million British thermal units (MMBtu), the benchmark gas futures price is actually slightly lower than it was a few weeks ago. As with oil, natural gas prices rallied furiously this spring. And like oil, the rally appears to be done now. The recent heat wave is pumping up demand for gas at power plants because of heavy air conditioner use, but supplies of gas in storage are well above normal for this time of year. That glut will likely weigh on gas prices, keeping the benchmark futures contract between $2.50 and $2.75 per MMBtu this summer.