Crude and gasoline prices will drop through 2014, EIA projects

The price of Brent crude oil is expected to decline slightly this year and next year, compared to the average price in 2012, according to an analysis by the U.S. Energy Information Administration.

Lower crude prices will mean lower pump prices, the agency said in its short-term energy outlook released Tuesday.

The EIA expects that the Brent oil spot price, the leading global benchmark for crude, will average $109 per barrel in 2013 and $101 per barrel in 2014. It averaged $112 per barrel in 2012 and rose to $119 per barrel earlier this month.

The agency also projects that the discount of West Texas Intermediate crude oil, a U.S. benchmark for crude prices, to Brent will narrow to an average $9 per barrel in 2014, from $18 per barrel in 2012, as planned new pipeline capacity lowers the cost of moving mid-continent crude oil to Gulf Coast refining centers.

The EIA predicts that the national annual average price for regular gasolinewill decline from $3.63 per gallon in 2012 to $3.55 per gallon this year and $3.39 per gallon in 2014. That’s about 11 cents per gallon and 4 cents per gallon higher, respectively, than forecast in last month’s short-term energy outlook, EIA said.

As for total U.S. crude oil production, the EIA expects the average to increase in 2013 to 7.3 million barrels per day from 6.4 million barrels per day last year. The agency expects it to increase to 7.8 million barrels per day in 2014.