Total crude oil production
According to the U.S. Energy Information Administration (or EIA), total crude oil production averaged 8.5 million barrels per day (or bbl/d) in July, the highest monthly production since April 1987. Total production averaged 7.5 million bbl/d in 2013. It’s projected to average 8.5 million bbl/d in 2014 and 9.3 million bbl/d in 2015—the highest annual average production since 1972.
Brent crude oil spot price reduced to an average of $107 per barrel in July, $5 per barrel lower than the June average. It’s projected to average $107 per barrel in the second half of the year and reduce to $105 per barrel in 2015.
The West Texas Intermediate (or WTI) crude oil price reduced to $104 per barrel in July from $106 per barrel in June. The EIA lowered its projections on the WTI discount to Brent by $1 per barrel, from $11 per barrel in 2013 to $8 per barrel in 2014 and $9 per barrel in 2015.
According to the IATA (or the International Air Transport Association), the recent decline in crude oil prices is due to weakening demand in Europe and Asia.
Jet fuel price reduced to 280 cents per gallon in July from 296 cents in June. But it rose to 287 cents in August 2014. The increase in jet fuel prices is due to rise in demand from growing fuel consumption in the airline industry, as industry demand and capacity have increased.
Jet fuel prices are expected to reduce slightly in the second half of the year but are expected to increase in 2015. An increase in jet fuel prices results in higher pressure on airline costs and profitability.