Rising Production Helping to Keep Fuel Prices in Check
Energy costs should be relatively easy on your wallet in 2014.

This year figures to be fairly calm for energy prices, with fewer sharp swings than consumers and businesses endured in 2013. Rising output of domestic crude oil and natural gas, and reduced tensions in the energy-rich Middle East, will combine to keep energy markets well supplied throughout the year.
In fact, motorists can look forward to a bit of a break on prices at the gas pump.
After spiking this past summer on fears that the Syrian civil war might draw in the U.S., the price of oil looks set to retreat slightly, taking gasoline and diesel costs with it. Improved drilling techniques have already boosted U.S. crude output by 60% since 2008, and the boom will continue this year.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
2014 could be the year the U.S. surpasses Saudi Arabia and Russia to become the world’s top oil producer, says Phil Flynn, an energy analyst with the Price Futures Group.
What’s more, the flood of new oil being tapped in the U.S.—plus rising output in Canada—is coming at the same time the pace of growth in global oil consumption appears to be moderating. The International Energy Agency, which tracks global energy trends, expects the gap between daily oil demand and available supplies to widen next year, taking some pressure off prices.
Look for crude oil prices to ease by about $5 to $10 per barrel. Over the course of the year, expect West Texas Intermediate—the U.S. benchmark for crude—to average about $85 to $90 per barrel, compared with the $95 or so that crude has averaged since 2011.
As a result, prices of regular unleaded gasoline will trend down, too, averaging $3.40 per gallon in 2014, versus $3.51 in 2013. Diesel fuel will also edge a bit lower, to about $3.
Still, violence and political upheaval in several key oil producing countries bear watching. Michael Lynch, of Massachusetts-based Strategic Energy & Economic Research, says that Venezuela’s worsening economy and mounting political turmoil present the biggest geopolitical threat to his forecast for modestly lower oil prices in 2014, as instability in South America’s biggest oil producing nation raises risks to crude exports. He also cautions that the recent agreement between Western powers and Iran regarding Tehran shuttering its nuclear program—which has helped calm oil markets recently—is far from a done deal.
Meanwhile, the price of natural gas—which affects everything from petrochemical profit margins to home heating bills—is likely to keep rising, continuing a rebound that began last year. But the gains will be modest, thanks to continued steady growth in supply from wells in Texas, Pennsylvania and other states. The benchmark wellhead price for natural gas, which averaged about $3.75 per million British thermal units in 2013, figures to hit $4 or so for 2014, thanks to growing demand. An exceptionally cold winter could briefly send gas prices higher, but by spring, demand will cool off. And modestly higher prices will encourage energy firms to drill new wells, ensuring that natural gas output keeps rising.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Jim joined Kiplinger in December 2010, covering energy and commodities markets, autos, environment and sports business for The Kiplinger Letter. He is now the managing editor of The Kiplinger Letter and The Kiplinger Tax Letter. He also frequently appears on radio and podcasts to discuss the outlook for gasoline prices and new car technologies. Prior to joining Kiplinger, he covered federal grant funding and congressional appropriations for Thompson Publishing Group, writing for a range of print and online publications. He holds a BA in history from the University of Rochester.
-
Markets Are Quiet Ahead of Fed Day: Stock Market Today
Investors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Quiz: Test Your Knowledge of the OBBB, Wealth Transfer and Early Retirement
Quiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the OBBB's impact on retirement, how to ensure your wealth passes to your family and early retirement questions.
-
Small Businesses Are Racing to Use AI
The Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
How AI Puts Company Data at Risk
The Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
AI Start-ups Are Rolling in Cash
The Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
What is AI Worth to the Economy?
The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
Kiplinger Special Report: Business Costs for 2026
Economic Forecasts Fresh forecasts for 2026, to help you plan ahead and prepare a budget on a range of business costs, from Kiplinger's Letters team.
-
How to Adopt AI and Keep Employees Happy
The Kiplinger Letter As business adoption of AI picks up, employee morale could take a hit. But there are ways to avoid an AI backlash.
-
AI-Powered Smart Glasses Set to Make a Bigger Splash
The Kiplinger Letter Meta leads the way with its sleek, fashionable smart glasses, but Apple reportedly plans to join the fray by late 2026. Improved AI will lure more customers.
-
Breaking China's Stranglehold on Rare Earth Elements
The Letter China is using its near-monopoly on critical minerals to win trade concessions. Can the U.S. find alternate supplies?