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Economic Forecasts

Oil Prices Change Little Despite OPEC Cuts

Kiplinger's latest forecast on the direction of energy prices


GDP 2.1% growth in ’17, following 1.6% in ’16 More »
Jobs Hiring pace should slow to 160K/month in '17 More »
Interest rates 10-year T-notes at 3% by end '17 More »
Inflation 2.4% in '17, up from 2.1% in '16 More »
Business spending Rising 3%-4% in ’17, after flat ’16 More »
Energy Crude oil trading from $55 to $60 per barrel in May More »
Housing Single-family starts up 9% in '16, 11% in '17 More »
Retail sales Growing 3.9% in '17 (excluding gas) More »
Trade deficit Widening 4% in '17, after nearly flat '16 More »

Motorists could soon be in for lower gasoline prices for a while. The national average price of regular unleaded climbed by a penny from last week to $2.28 per gallon. But with crude oil prices holding steady and stockpiles of oil and refined fuels building up in storage, we look for the price at the pump to ease by a few cents in the next week or two. Diesel, now averaging $2.51 per gallon, is unlikely to move much, either up or down, in the near term.

By the time spring arrives, gas prices figure to start rising modestly as refiners switch to producing costlier summer-blend gas formulations. Figure on regular unleaded averaging closer to $2.50 per gallon this spring — still relatively low, compared with a few years ago, when gas prices routinely exceeded $3 per gallon.

Via E-mail: Energy Alerts from Kiplinger

Despite OPEC’s best efforts, the price of crude oil seems stuck in a narrow trading range between $50 and $55 per barrel for benchmark West Texas Intermediate. Some OPEC members are cutting back production to tighten the market and push prices higher. But other members were exempted from that plan and are boosting their own exports, keeping the global oil market well supplied. The U.S. is also producing more as energy companies rush to drill new wells. So, we look for WTI to continue trading in that range in coming weeks, before gradually rising to a range of $55 to $60 by late spring.


Natural gas prices continue to weaken due to unseasonably warm weather forecast for much of the United States. Heating demand promises to remain weak, which could leave a glut of gas in storage when winter ends. If the warm trend persists, we look for the benchmark gas futures contract to continue to trade at its current level of a bit less than $3 per million British thermal units. However, if colder weather returns before winter ends, look for gas to rebound to between $3.25 and $3.50.

Source: Department of Energy, Price Statistics