The Energy Information Administration is anticipating a decline in U.S. refinery capacity by the end of 2025.
LyondelBasel Industries’ plan to close its Houston refinery in the first quarter of 2025 as well as Phillips 66 announcing the closure of its Los Angeles refinery in the fourth quarter of 2025 factored into EIA’s expectation. The closure of those two refineries will result in removing more than 400,000 barrels per day of capacity.
However, that same forecast calls for the pricing difference between a barrel of crude oil and the petroleum products refined from it (known as the crack spread) to remain about the same.
“Crack spreads have been declining steadily since 2022, and we expect them to hold steady next year, even with the decrease in refining capacity,” EIA Administrator Joe DeCarolis said. “The good news from a consumer perspective is that lower crack spreads have resulted in reduced gasoline and diesel prices at the pump.”
EIA is forecasting an average diesel price of $3.60 per gallon in 2025, according to its November short-term energy outlook. EIA’s latest weekly update said the national average was $3.521 per gallon on Monday, Nov. 11.
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Average fuel prices are updated daily on this Land Line resources page.
ProMiles and AAA monitor diesel prices across the nation daily and showed an average price per gallon of $3.483 and $3.553, respectively, on Friday, Nov. 15.
Other fuels
U.S. natural gas production is forecast to remain mostly unchanged in 2024, compared to the previous year.
Electric generation will increase by 3% in 2024, with continued growth expected in 2025. U.S. solar generation will grow another 31% in 2025 as higher natural gas prices reduce electricity demand, EIA said in its forecast.
Global market
By the end of 2024, EIA expects global liquid fuels consumption to increase by 1 million barrels per day and by 1.2 million by the end of 2025. Most of that consumption is in Asia, particularly India, which has become the leading source of growth in global oil consumption in EIA’s forecast.
EIA expects ongoing geopolitical risks and withdrawals from global oil inventories due to OPEC+ production cuts will put upward pressure on oil prices in the near term. Brent crude oil is forecast to average $78 per barrel in the first quarter of 2025. By the second half of 2025, the Brent crude average price per barrel is expected to drop to $74. LL
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