GOOD NEWS FOR ALASKA ECONOMY
Brent crude oil prices will average $71 per barrel this year, and $68 in 2019, according to the latest Energy Information Agency forecast.
The updated 2019 price is $2 per barrel higher than what was projected by the agency just a month ago.
Alaska North Slope crude oil prices track Brent prices fairly closely, which makes it an important bellwether for Alaska’s economy. Today’s price for ANS crude is $73.20. A year ago today it was $46.65.
The FY19 state budget balances at $71 per barrel, including the percent of market value (POMV) draw amount from the Permanent Fund Earnings Reserve to pay for state government and Permanent Fund dividends.
The average barrels per day coming from the North Slope this year is 540,763. The throughput in May was 529,382, trending down as the warm season brings lower volumes and scheduled maintenance that occurs during summer months.
This year, to date, the Trans Alaska Pipeline has shipped 81,655,186 barrels to market. Last year, a total of 192,472,797 barrels were shipped during the year, measurably higher than 2014, 2015, and 2016.
In the June update of its Short-Term Energy Outlook the agency said Brent crude oil spot prices averaged $77 per barrel in May, an increase of of $5 per barrel from April and the highest monthly average price since November 2014.
Prices for crude oil have risen as global inventories have declined over the past 18 month.
According to EIA, most of the global growth in oil production in the coming months will be from the United States with crude oil production averaging 10.8 million barrels per day in 2018, up nearly double from 2017.
In 2019, U.S. production is projected to be nearly 12 million a day, which will be the highest domestic production level on record.