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Low oil prices projected to continue through 2016, according to DOT report


The Washington Department of Transportation released the Jan. 2016 edition of the "Fuel and Vehicle Trends Report." The report discusses the movement of two crude oil indicators, West Texas Intermediate (WTI) and Brent oil, sourced from the north Atlantic.

In January, West Texas Intermediate (WTI) crude oil prices averaged $32.8 per barrel. Brent oil prices  during the month averaged $31.9 per barrel. The WTI price was down to $29.19 per barrel for the week ending Jan. 22, according to the report.

Oversupply of oil and weak demand is given as the reason for low prices. The Energy Information Administration's short term outlook listed actual WTI average price for 2015 at $48.67 per barrel. They forcast $38.54 per barrel for 2016 and $47 per barrel for 2017. IHS Global Insight put the numbers at $48.84 per barrel for 2015 and projected $45.12 for 2016 and $54.71 for 2017, according to the report.

The report also states that Energy Information Administration estimates that U.S. Oil production averaged 9.4 million barrel per day in 2015. They project production to decline to 8.7 million barrels per day in 2016 and 8.5 million barrels per day in 2017.

Inventories of crude oil are high with the reported level of 482.3 million barrels (excluding Strategic Petroleum Reserve) about 89 million barrels, or 22.6 percent higher than December 2014. The highest crude oil stock volume in recent history occurred in November 2015 with 487.3 million barrels, according to the report, a volume that has not been seen since November 1930.

The report states that October 2015 storage of West Coast Petroleum for Defense District (PADD5) was 28.8 million gallons of gasoline, which was 6.6 percent higher than October 2014. The forecast predicts higher volumes for 2016 with April projected at 508.1 million gallons.

In December, Washington retail gasoline price monthly average dropped to $2.39 per gallon which was a $0.42 per gallon or 15 percent from December 2014. In January 2016, retail gas prices averaged $2.33 per gallon, $0.06 per gallon lower than the prior month.  

Diesel prices in Washington continue to fall in recent months even faster than retail gas prices. In January, the Washington average retail diesel price was $2.45 per gallon which was a decline of 9.6 percent in the last three months, according to the report.

Since the November 2015 transportation revenue forecast, two months of fuel tax collections (November and December) came in above the last forecast by $1.7 million or 0.7 percent combined for both gas and diesel tax collections.. 

Since the last forecast, October through December, licenses, permits and fee (LPF) revenue. also came in above forecast by $5.6 million or 4.4 percent.

 The report is available on-line at http://www.wsdot.wa. gov/Finance/FuelVehicleTrends.htm .


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