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Nebraska Department of Environment & Energy

Planning & Aid Division

Gasoline and Diesel Prices Monitor

Nebraska Department of Environment and Energy

P.O. Box 98922|Lincoln, NE 68509

Phone (402) 471-2186|Toll Free (877) 253-2603

Gasoline and Diesel Prices Monitor

July 2021

Crude Oil and Liquid Fuels

U.S. economic activity continues to rise after reaching multiyear lows in the second quarter of 2020. The increase in economic activity and easing of the COVID–19 pandemic have contributed to rising energy use. U.S. gross domestic product (GDP) declined by 3.5% in 2020 from 2019 levels.

The Energy Information Administration (EIA) assumes U.S. GDP will grow by 7.4% in 2021 and by 5.0% in 2022. Brent crude oil spot prices averaged $73 per barrel in June, up $5 per barrel from May and $33 per barrel higher than in June of last year. In the coming months, EIA expects that global oil production, largely from OPEC+ members (OPEC and partner nonmember countries), will increase by more than global oil consumption. EIA expects rising production will reduce the persistent global oil inventory draws that have occurred for much of the past year and keep prices similar to current levels, averaging $72 per barrel during the second half of 2021. However, in 2022, EIA expects that continuing growth in production from OPEC+ and accelerating growth in U.S. tight oil production, along with other supply growth, will outpace growth in global oil consumption and contribute to declining oil prices. Based on these factors, EIA expects Brent to average $67 per barrel in 2022.

Based on EIA's estimates, global liquid fuels inventories rose by 7.3 million barrels per day in the first half of 2020 before declining at an average rate of 2.1 million barrels per day in the second half of 2020 and the first half of 2021. EIA forecasts global inventories will continue to fall in the near term but at a slower rate, with global inventories falling by 0.2 million barrels per day in the second half of 2021. EIA then expects inventories to rise by almost 0.5 million barrels per day in 2022.

North Sea Brent crude oil spot prices are expected to average $69 per barrel in 2021 and $67 per barrel in 2022.

WTI crude oil spot prices are expected to average $66 per barrel in 2021 and $63 per barrel in 2022.

Gasoline and Diesel Prices

U.S. regular gasoline retail prices averaged $2.78 per gallon in the first half of 2021, compared with an average of $2.20 per gallon in the first half of 2020. In June, monthly retail gasoline prices averaged $3.06 per gallon, the first time the monthly average was more than $3.00 per gallon since October 2014 (in nominal terms). EIA forecasts regular–grade gasoline prices to average $2.92 per gallon in the second half of 2021 and $2.74 per gallon for all of 2022.

The peak price of $4.10 per gallon for gasoline in Nebraska was reached on July 15, 2008.

U.S. on–highway diesel fuel retail prices averaged $2.55 per gallon in 2020. EIA expects on–highway diesel fuel retail prices to average $3.16 per gallon in 2021 and $3.09 per gallon in 2022.

The peak price of $4.77 per gallon for diesel in Nebraska was reached on July 17, 2008. The July "Short–Term Energy Outlook" (STEO).

Because taxes and retail distribution costs are generally stable, movements in gasoline and diesel prices are driven primarily by changes in crude oil prices and wholesale margins. Crude oil prices that differ from the forecast would be reflected in the price of motor fuels. Each dollar per barrel of sustained change in crude oil prices relative to the forecast translates into approximately a 2.4 cent-per-gallon change in product prices.